EX-3 4 exhibit3-agreementfinalaugus.htm exhibit3-agreementfinalaugus.htm - Generated by SEC Publisher for SEC Filing

AGREEMENT

     Made as of this 30th day of August, 2017, by and among VANGUARD ADMIRAL FUNDS, VANGUARD BOND INDEX FUNDS, VANGUARD CALIFORNIA TAX-FREE FUNDS, VANGUARD CHARLOTTE FUNDS, VANGUARD CHESTER FUNDS, VANGUARD CMT FUNDS, VANGUARD CONVERTIBLE SECURITIES FUND, VANGUARD EXPLORER FUND, VANGUARD FENWAY FUNDS, VANGUARD FIXED INCOME SECURITIES FUNDS, VANGUARD HORIZON FUNDS, VANGUARD INDEX FUNDS, VANGUARD INSTITUTIONAL INDEX FUNDS, VANGUARD INTERNATIONAL EQUITY INDEX FUNDS, VANGUARD MALVERN FUNDS, VANGUARD MASSACHUSETTS TAX-EXEMPT FUNDS, VANGUARD MONEY MARKET RESERVES, VANGUARD MONTGOMERY FUNDS, VANGUARD MORGAN GROWTH FUND, VANGUARD MUNICIPAL BOND FUNDS, VANGUARD NEW JERSEY TAX-FREE FUNDS, VANGUARD NEW YORK TAX-FREE FUNDS, VANGUARD OHIO TAX-FREE FUNDS, VANGUARD PENNSYLVANIA TAX-FREE FUNDS, VANGUARD QUANTITATIVE FUNDS, VANGUARD SCOTTSDALE FUNDS, VANGUARD SPECIALIZED FUNDS, VANGUARD STAR FUNDS, VANGUARD TAX-MANAGED FUNDS, VANGUARD TRUSTEES’ EQUITY FUND, VANGUARD VALLEY FORGE FUNDS, VANGUARD VARIABLE INSURANCE FUNDS, VANGUARD WELLESLEY INCOME FUND, VANGUARD WELLINGTON FUND, VANGUARD WHITEHALL FUNDS, VANGUARD WINDSOR FUNDS, AND VANGUARD WORLD FUND (hereinafter collectively referred to as the “Funds”) and THE VANGUARD GROUP, INC. (“Vanguard”), AND VANGUARD MARKETING CORPORATION (“VMC”).

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, Vanguard and WMC 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 members of the Boards 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 Boards have 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, Vanguard and VMC 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:

1. ALLOCATION OF PREMIUMS

     The annual premium shall be allocated among the Funds, based on relative net assets, in accordance with a Board-approved methodology, and expensed monthly over the term of the Joint Insured Bond.

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.

 

3. BOND COVERAGE REQUIRED

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) 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.

     6. No amendment, modification, or supplement of any provision of this Agreement will be valid or effective unless made in writing and signed by a duly authorized representative of each party. Notwithstanding the foregoing, Exhibit A to this Agreement shall be reviewed and updated by the parties from time to time as agreed by the parties. Such Exhibit A may be revised and replaced by (a) mutual written agreement, which does not require an amendment to the Agreement, or (b) one party providing written notice to the other parties. Such written agreement or notice shall set forth the revised version of the Exhibit A and the date on which such revisions shall be effective.

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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed on their behalf by their duly authorized officers as of the date first written above.

VANGUARD ADMIRAL FUNDS
VANGUARD BOND INDEX FUNDS
VANGUARD CALIFORNIA TAX-FREE FUNDS
VANGUARD CHARLOTTE FUNDS
VANGUARD CHESTER FUNDS
VANGUARD CMT FUNDS
VANGUARD CONVERTIBLE SECURITIES FUND
VANGUARD EXPLORER FUND
VANGUARD FENWAY FUNDS
VANGUARD FIXED INCOME SECURITIES FUNDS
VANGUARD HORIZON FUNDS
VANGUARD INDEX FUNDS
VANGUARD INSTITUTIONAL INDEX FUNDS
VANGUARD INTERNATIONAL EQUITY INDEX FUNDS
VANGUARD MALVERN FUNDS
VANGUARD MASSACHUSETTS TAX-EXEMPT FUNDS
VANGUARD MONEY MARKET RESERVES
VANGUARD MONTGOMERY FUNDS
VANGUARD MORGAN GROWTH FUND
VANGUARD MUNICIPAL BOND FUNDS
VANGUARD NEW JERSEY TAX-FREE FUNDS
VANGUARD NEW YORK TAX-FREE FUNDS
VANGUARD OHIO TAX-FREE FUNDS
VANGUARD PENNSYLVANIA TAX-FREE FUNDS
VANGUARD QUANTITATIVE FUNDS
VANGUARD SCOTTSDALE FUNDS
VANGUARD SPECIALIZED FUNDS
VANGUARD STAR FUNDS
VANGUARD TAX-MANAGED FUNDS
VANGUARD TRUSTEES’ EQUITY FUND
VANGUARD VARIABLE INSURANCE FUNDS
VANGUARD VALLEY FORGE FUNDS
VANGUARD WELLESLEY INCOME FUND
VANGUARD WELLINGTON FUND
VANGUARD WHITEHALL FUNDS
VANGUARD WINDSOR FUNDS
VANGUARD WORLD FUND

 

By: /s/ Anne E. Robinson
  Anne E. Robinson
Secretary 
 
 
Attest: /s/ Laura J. Merianos
  Laura J. Merianos
  Assistant Secretary

 

 

THE VANGUARD GROUP, INC.

By: /s/ Anne E. Robinson
  Anne E. Robinson
  Managing Director, General Counsel, and Secretary
 
 
Attest: /s/ Michael L. Kimmel
  Michael L. Kimmel
  Principal and Assistant Secretary

 

VANGUARD MARKETING CORPORATION

By: /s/ Anne E. Robinson
  Anne E. Robinson
  Director and Senior Vice President
 
 
Attest: /s/ Michael L. Kimmel
Michael L. Kimmel 
  Assistant Secretary

 

 

EXHIBIT A

Rule 17g-1
Minimum Bond Requirements

As of 5/31/2017

    Bond
Fund/Portfolio Name Net Assets Requirement
 
Vanguard Admiral Funds 22,873,605,932 2,500,000
Vanguard S&P 500 Growth Index Fund    
Vanguard S&P 500 Value Index Fund    
Vanguard S&P Mid-Cap 400 Growth Index Fund    
Vanguard S&P Mid-Cap 400 Index Fund    
Vanguard S&P Mid-Cap 400 Value Index Fund    
Vanguard S&P Small-Cap 600 Growth Index Fund    
Vanguard S&P Small-Cap 600 Index Fund    
Vanguard S&P Small-Cap 600 Value Index Fund    
Vanguard Treasury Money Market Fund    
Vanguard Bond Index Funds 430,511,236,091 2,500,000
Vanguard Inflation-Protected Securities Fund    
Vanguard Intermediate-Term Bond Index Fund    
Vanguard Long-Term Bond Index Fund    
Vanguard Short-Term Bond Index Fund    
Vanguard Total Bond Market Index Fund    
Vanguard Total Bond Market II Index Fund    
Vanguard California Tax-Free Funds 19,603,365,242 2,500,000
Vanguard California Intermediate-Term Tax-Exempt Fund    
Vanguard California Long-Term Tax-Exempt Fund    
Vanguard California Municipal Money Market Fund    
Vanguard Charlotte Funds 84,915,692,592 2,500,000
Vanguard Total International Bond Index Fund    
Vanguard Chester Funds 383,034,016,462 2,500,000
Vanguard Institutional Target Retirement Income Fund    
Vanguard Institutional Target Retirement 2010 Fund    
Vanguard Institutional Target Retirement 2015 Fund    
Vanguard Institutional Target Retirement 2020 Fund    
Vanguard Institutional Target Retirement 2025 Fund    
Vanguard Institutional Target Retirement 2030 Fund    
Vanguard Institutional Target Retirement 2035 Fund    
Vanguard Institutional Target Retirement 2040 Fund    
Vanguard Institutional Target Retirement 2045 Fund    

 

 

Vanguard Institutional Target Retirement 2050 Fund    
Vanguard Institutional Target Retirement 2055 Fund    
Vanguard Institutional Target Retirement 2060 Fund    
Vanguard PRIMECAP Fund    
Vanguard Target Retirement Income Fund    
Vanguard Target Retirement 2010 Fund    
Vanguard Target Retirement 2015 Fund    
Vanguard Target Retirement 2020 Fund    
Vanguard Target Retirement 2025 Fund    
Vanguard Target Retirement 2030 Fund    
Vanguard Target Retirement 2035 Fund    
Vanguard Target Retirement 2040 Fund    
Vanguard Target Retirement 2045 Fund    
Vanguard Target Retirement 2050 Fund    
Vanguard Target Retirement 2055 Fund    
Vanguard Target Retirement 2060 Fund    
Vanguard CMT Funds 61,676,169,293 2,500,000
Vanguard Market Liquidity Fund    
Vanguard Municipal Cash Management Fund    
Vanguard Convertible Securities Fund 1,385,318,096 1,250,000
Vanguard Explorer Fund 12,112,170,120 2,500,000
Vanguard Fenway Funds 37,662,611,620 2,500,000
Vanguard Equity Income Fund    
Vanguard PRIMECAP Core Fund    
Vanguard Fixed Income Securities Funds 177,988,359,366 2,500,000
Vanguard GNMA Fund    
Vanguard High-Yield Corporate Fund    
Vanguard Intermediate-Term Investment-Grade Fund    
Vanguard Intermediate-Term Treasury Fund    
Vanguard Long-Term Investment-Grade Fund    
Vanguard Long-Term Treasury Fund    
Vanguard Short-Term Federal Fund    
Vanguard Short-Term Investment-Grade Fund    
Vanguard Short-Term Treasury Fund    
Vanguard Ultra-Short-Term Bond Fund    
Vanguard Horizon Funds 29,391,782,233 2,500,000
Vanguard Capital Opportunity Fund    
Vanguard Global Equity Fund    
Vanguard Strategic Equity Fund    
Vanguard Strategic Small-Cap Equity Fund    
Vanguard Index Funds 1,322,159,978,349 2,500,000
Vanguard 500 Index Fund    
Vanguard Extended Market Index Fund    

 

 

Vanguard Growth Index Fund    
Vanguard Large-Cap Index Fund    
Vanguard Mid-Cap Growth Index Fund    
Vanguard Mid-Cap Index Fund    
Vanguard Mid-Cap Value Index Fund    
Vanguard Small-Cap Growth Index Fund    
Vanguard Small-Cap Index Fund    
Vanguard Small-Cap Value Index Fund    
Vanguard Total Stock Market Index Fund    
Vanguard Value Index Fund    
Vanguard Institutional Index Funds 268,350,062,673 2,500,000
Vanguard Institutional Index Fund    
Vanguard Institutional Total Stock Market Index Fund    
Vanguard International Equity Index Funds 155,258,395,556 2,500,000
Vanguard Emerging Markets Stock Index Fund    
Vanguard European Stock Index Fund    
Vanguard FTSE All-World Ex-US Index Fund    
Vanguard FTSE All-World Ex-US Small-Cap Index Fund    
Vanguard Global ex-U.S. Real Estate Index Fund    
Vanguard Pacific Stock Index Fund    
Vanguard Total World Stock Index Fund    
Vanguard Malvern Funds 44,350,263,542 2,500,000
Vanguard Capital Value Fund    
Vanguard Core Bond Fund    
Vanguard Emerging Markets Bond Fund    
Vanguard Institutional Intermediate-Term Bond Fund    
Vanguard Institutional Short-Term Bond Fund    
Vanguard Short-Term Inflation-Protected Securities Index Fund    
Vanguard U.S. Value Fund    
Vanguard Massachusetts Tax-Exempt Funds 1,593,761,214 1,500,000
Vanguard Massachusetts Tax-Exempt Fund    
Vanguard Money Market Reserves 171,750,474,913 2,500,000
Vanguard Federal Money Market Fund    
Vanguard Prime Money Market Fund    
Vanguard Montgomery Funds 2,064,577,696 1,700,000
Vanguard Market Neutral Fund    
Vanguard Morgan Growth Fund 12,153,486,090 2,500,000
Vanguard Municipal Bond Funds 132,167,796,242 2,500,000
Vanguard High-Yield Tax-Exempt Fund    
Vanguard Intermediate-Term Tax-Exempt Fund    
Vanguard Limited-Term Tax-Exempt Fund    
Vanguard Long-Term Tax-Exempt Fund    
Vanguard Short-Term Tax-Exempt Fund    

 

 

Vanguard Tax-Exempt Bond Index Fund    
Vanguard Municipal Money Market Fund    
Vanguard New Jersey Tax-Free Funds 3,295,807,144 2,100,000
Vanguard New Jersey Long-Term Tax-Exempt Fund    
Vanguard New Jersey Municipal Money Market Fund    
Vanguard New York Tax-Free Funds 6,550,327,199 2,500,000
Vanguard New York Long-Term Tax-Exempt Fund    
Vanguard New York Municipal Money Market Fund    
Vanguard Ohio Tax-Free Funds 1,163,855,924 1,250,000
Vanguard Ohio Long-Term Tax-Exempt Fund    
Vanguard Pennsylvania Tax-Free Funds 5,426,390,547 2,500,000
Vanguard Pennsylvania Long-Term Tax-Exempt Fund    
Vanguard Pennsylvania Municipal Money Market Fund    
Vanguard Quantitative Funds 7,467,999,328 2,500,000
Vanguard Growth and Income Fund    
Vanguard Scottsdale Funds 64,536,267,094 2,500,000
Vanguard Explorer Value Fund    
Vanguard Intermediate-Term Corporate Bond Index Fund    
Vanguard Intermediate-Term Government Bond Index Fund    
Vanguard Long-Term Corporate Bond Index Fund    
Vanguard Long-Term Government Bond Index Fund    
Vanguard Mortgage-Backed Securities Index Fund    
Vanguard Russell 1000 Growth Index Fund    
Vanguard Russell 1000 Index Fund    
Vanguard Russell 1000 Value Index Fund    
Vanguard Russell 2000 Growth Index Fund    
Vanguard Russell 2000 Index Fund    
Vanguard Russell 2000 Value Index Fund    
Vanguard Russell 3000 Index Fund    
Vanguard Short-Term Corporate Bond Index Fund    
Vanguard Short-Term Government Bond Index Fund    
Vanguard Specialized Funds 183,405,311,494 2,500,000
Vanguard Dividend Appreciation Index Fund    
Vanguard Dividend Growth Fund    
Vanguard Energy Fund    
Vanguard Health Care Fund    
Vanguard Precious Metals and Mining Fund    
Vanguard REIT Index Fund    
Vanguard STAR Funds 341,363,697,247 2,500,000
Vanguard LifeStrategy Conservative Growth Fund    
Vanguard LifeStrategy Growth Fund    
Vanguard LifeStrategy Income Fund    
Vanguard LifeStrategy Moderate Growth Fund    

 

 

Vanguard STAR Fund    
Vanguard Total International Stock Index Fund    
Vanguard Tax-Managed Funds 103,220,260,945 2,500,000
Vanguard Developed Markets Index Fund    
Vanguard Tax-Managed Balanced Fund    
Vanguard Tax-Managed Capital Appreciation Fund    
Vanguard Tax-Managed Small-Cap Fund    
Vanguard Trustees' Equity Fund 11,232,852,100 2,500,000
Vanguard Alternative Strategies Fund    
Vanguard Diversified Equity Fund    
Vanguard Emerging Markets Select Stock Fund    
Vanguard International Value Fund    
Vanguard Valley Forge Funds 35,600,617,833 2,500,000
Vanguard Balanced Index Fund    
Vanguard Managed Payout Fund    
Vanguard Variable Insurance Funds 26,857,611,920 2,500,000
Vanguard Balanced Portfolio    
Vanguard Capital Growth Portfolio    
Vanguard Conservative Allocation Portfolio    
Vanguard Diversified Value Portfolio    
Vanguard Equity Income Portfolio    
Vanguard Equity Index Portfolio    
Vanguard Growth Portfolio    
Vanguard High Yield Bond Portfolio    
Vanguard International Portfolio    
Vanguard Mid-Cap Index Portfolio    
Vanguard Moderate Allocation Portfolio    
Vanguard Money Market Portfolio    
Vanguard REIT Index Portfolio    
Vanguard Short-Term Investment-Grade Portfolio    
Vanguard Small Company Growth Portfolio    
Vanguard Total Bond Market Index Portfolio    
Vanguard Total Stock Market Index Portfolio    
Vanguard Wellesley Income Fund 52,434,864,859 2,500,000
Vanguard Wellington Fund 100,071,536,493 2,500,000
Vanguard Whitehall Funds 46,959,608,273 2,500,000
Vanguard Emerging Markets Government Bond Index Fund    
Vanguard Global Minimum Volatility Fund    
Vanguard High Dividend Yield Index Fund    
Vanguard International Dividend Appreciation Index Fund    
Vanguard International Explorer Fund    
Vanguard International High Dividend Yield Index Fund    
Vanguard Mid-Cap Growth Fund    

 

 

Vanguard Selected Value Fund      
Vanguard Windsor Funds   66,462,832,155 2,500,000
Vanguard Windsor Fund      
Vanguard Windsor II Fund      
Vanguard World Fund   94,718,763,420 2,500,000
Vanguard Consumer Discretionary Index Fund      
Vanguard Consumer Staples Index Fund      
Vanguard Energy Index Fund      
Vanguard Extended Duration Treasury Index Fund      
Vanguard FTSE Social Index Fund      
Vanguard Financials Index Fund      
Vanguard Health Care Index Fund      
Vanguard Industrials Index Fund      
Vanguard Information Technology Index Fund      
Vanguard International Growth Fund      
Vanguard Materials Index Fund      
Vanguard Mega Cap Growth Index Fund      
Vanguard Mega Cap Index Fund      
Vanguard Mega Cap Value Index Fund      
Vanguard Telecommunication Services Index Fund      
Vanguard U.S. Growth Fund      
Vanguard Utilities Index Fund      
 
  TOTALS 4,521,771,727,297 87,800,000