-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Reb+IN0W+F6Xe9BsQy/kZZ4lvq1NkQAKqWknmdOhLqVf0ftbFGiMMgk7NIxEiHV+ irQG+RTmU/wzX0pxMCok6w== 0000932471-06-000740.txt : 20091029 0000932471-06-000740.hdr.sgml : 20091029 20060412143757 ACCESSION NUMBER: 0000932471-06-000740 CONFORMED SUBMISSION TYPE: CORRESP PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20060412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VANGUARD BALANCED INDEX FUND CENTRAL INDEX KEY: 0000889519 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: CORRESP BUSINESS ADDRESS: STREET 1: P O BOX 2600 STREET 2: V26 CITY: VALLEY FORGE STATE: PA ZIP: 19482 BUSINESS PHONE: 6106696295 MAIL ADDRESS: STREET 1: P.O. BOX 2600 STREET 2: V26 CITY: VALLEY FORGE STATE: PA ZIP: 19482 FORMER COMPANY: FORMER CONFORMED NAME: VANGUARD BALANCED INDEX FUNDS DATE OF NAME CHANGE: 20070223 FORMER COMPANY: FORMER CONFORMED NAME: VANGUARD BALANCED INDEX FUND DATE OF NAME CHANGE: 20011121 FORMER COMPANY: FORMER CONFORMED NAME: VANGUARD BALANCED INDEX FUND INC DATE OF NAME CHANGE: 19920715 CORRESP 1 filename1.txt [SHIP][VANGUARD] P.O. Box 2600 Valley Forge, PA 19482-2600 610-669-1538 Judy_L_Gaines April 12, 2006 Christian Sandoe, Esq. Division of Investment Management U.S. Securities and Exchange Commission VIA ELECTRONIC FILING 450 Fifth Street, N.W., Fifth Floor Washington, D.C. 20549 RE: VANGUARD BALANCED INDEX FUND Dear Mr. Sandoe: The following responds to your comments of April 11, 2006 on the post-effective amendment of the registration statement of the above-referenced registrant. You commented on Post-Effective Amendment No. 28 that was filed on February 24, 2006. COMMENT 1: PROSPECTUS - PRIMARY INVESTMENT STRATEGIES - ---------- ------------------------------------------ Comment: Consider adding information to this section regarding the credit quality and maturity of the bond portion, and the market-capitalization of the stock portion. Response: We have considered the comment and do not plan to make the requested revision. We include the more detailed information in our Item 4 disclosure. Since Form N-1A does not specifically require credit quality and market capitalization in the Item 2 disclosure, and since our Item 2 disclosure summarizes the highlights that are more fully fleshed out in our Item 4 disclosure, we are comfortable with our existing disclosure. COMMENT 2: PROSPECTUS - FREQUENT TRADING OR MARKET TIMING - ---------- ---------------------------------------------- Comment: The Fund's broad policies with respect to frequent trading and market-timing are disclosed under the heading "Frequent Trading or Market-Timing." However, specific policies applicable to discrete types of investors are disclosed in various places throughout the "Investing with Vanguard" section. All of the Fund's policies concerning frequent trading and market-timing should be disclosed together under the heading "Frequent Trading and Market-Timing." Response: We believe that the Fund's policies against frequent trading and market-timing are properly disclosed in the prospectus pursuant April 12, 2006 Page 2 to Item 6(e)(4) of Form N-1A. Item 6(e)(4) does not require that the specific policies applicable to each type of shareholder be disclosed together in the prospectus. As such, we believe that it is appropriate to have the general discussion of the Fund's policies against frequent trading and market-timing under the heading "Frequent Trading or Market-Timing" with a reference to the "Investing with Vanguard" section where specific policies applicable to different types of shareholders and transactions are disclosed. We believe that removing the disclosure from the "Investing with Vanguard" section and combining the disclosure into a single "Frequent Trading and Market-Timing" section would make the discussion of transaction policies incomplete in the "Investing with Vanguard" section. Repeating the specific policies in both the "Investing with Vanguard" section and under the "Frequent Trading and Market-Timing" heading would unnecessarily clutter the prospectus with duplicative disclosure. COMMENT 3: PROSPECTUS - INVESTMENT ADVISOR - ---------- ------------------------------- Comment: Please add details regarding Mr. Davis' business experience during the past 5 years. Response: We will add the requested clarification. COMMENT 4: SAI - INVESTMENT LIMITATIONS - ---------- ---------------------------- Comment: Although our SAI says that fundamental investment limitations are tested at the time securities are purchased, there are borrowing requirements under the 1940 Act that require adjustments to fund holdings within specific time periods if limits are exceeded. The SAI disclosure should be revised accordingly. Response: In the Investment Policies section of the SAI under the "Borrowing" heading, we disclose the regulatory requirement that a fund must have continuous asset coverage of 300% of the amount borrowed. We also disclose that if a fund's 300% asset coverage declines due to market fluctuation, a fund may be required to sell some of its portfolio holdings within three days to restore the 300% asset coverage. In the Investment Limitations section of the SAI, we disclose our fundamental borrowing limitation as follows, "The Fund may not borrow in excess of 15% of its net assets, and any borrowings by the Fund must comply with all applicable regulatory requirements." (emphasis added) We think that these two sections, when read together, address the comment sufficiently. COMMENT 5: SAI - DESCRIPTION OF COMPENSATION - ---------- --------------------------------- Comment: Please expand on the discussion of the PM compensation by specifying what benchmark index each PM is compared to in determining his compensation. Response: We will make the requested revisions. April 12, 2006 Page 3 COMMENT 6 - TANDY REQUIREMENTS - ------------------------------ Comment: The SEC is now requiring all registrants to provide at the end of response letters to registration statement comments, the following statements: o The Fund is responsible for the adequacy and accuracy of the disclosure in the filing. o Staff comments or changes in response to staff comments in the filings reviewed by the staff do not foreclose the Commission from taking any action with respect to the filing. o The Fund may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. Response: As required by the SEC, we will provide the foregoing acknowledgements. * * * * * As required by the SEC, the Fund acknowledges that: o The Fund is responsible for the adequacy and accuracy of the disclosure in the filing. o Staff comments or changes in response to staff comments in the filings reviewed by the staff do not foreclose the Commission from taking any action with respect to the filing. o The Fund may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. Please contact me at (610) 669-1538 with any questions or comments regarding the above responses. Thank you. Sincerely, Judith L. Gaines Associate Counsel Securities Regulation, Legal Department -----END PRIVACY-ENHANCED MESSAGE-----