The Vanguard Group

Widely recognized service. Vanguard has succeeded in bringing to investors competitive investment performance and superior shareholder service. A 1999 survey taken of Mutual Funds magazine subscribers voted Vanguard tops in service and as the favorite fund family overall. In November 1999, the publication also ranked Vanguard first for delivering top service to its shareholders through its award-winning Website (www.vanguard.com).

Consistent fund performance. Vanguard regularly receives high honors in financial publication rankings of mutual fund performance. Vanguard dominated the most recent Forbes "Best Buys" ranking, with a showing of 44 of the 184 funds (24%) listed. Seven Vanguard funds appeared on Consumer Reports' "pick of the funds" listing, which ranked 115 equity funds in various categories, rated on three-year return. Finally, Vanguard placed 11 funds on BusinessWeek's "A List" of 121 equity funds that delivered the best risk-adjusted total returns over the prior five years.

Unique corporate structure. Under Vanguard's operating structure, shareholders are more than mere investors. Unlike traditional fund organizations, in which a management company controls the funds, Vanguard operates solely on behalf of its funds and shareholders. The Vanguard funds are independent investment companies that jointly own The Vanguard Group, which provides management, administrative, and marketing services to the funds on an "at-cost" basis.

Diverse investment choices. Vanguard offers a broad selection of seasoned investment alternatives, ranging from aggressive stock funds and passively managed index funds to income-oriented bond funds and conservative money market portfolios.

Low-cost advantage. Vanguard is recognized as the lowest-cost provider of mutual funds in the industry, with a 1999 average expense ratio of 0.27% -- about a fifth of the industry average of 1.31%. This 1.04 percentage point differential saved shareholders $5 billion for 1999.

Mutual funds are managed with discipline. Vanguard maintains style purity within its mutual funds. For example, a Vanguard mid-cap value fund will always remain so; a shareholder who invests in such a fund need not worry about the fund drifting into small-cap growth stocks and thereby frustrating his or her desired investment approach. The company manages its funds with a long-term orientation and clear objectives. The company's goal is to provide investment returns that are both competitive with those of similar mutual funds and, in most cases, relatively predictable in performance compared with unmanaged benchmark indexes.

Investment in technology. Vanguard is a technology leader, spending nearly half of its operating budget on technology initiatives. One of the most visible examples of this effort is its Website, which was recently enhanced to provide a comprehensive array of new transaction and communication services. In addition, Vanguard provides innovative online services for corporate retirement plans (The Vanguard Bridge) and for plan participants (Participant Online, Vanguard Navigator Plus). As a result, Vanguard was ranked in the top 50 in Information Week's 1999 ranking of the 500 leading corporate users of information technology.

Vanguard.com also received high honors in the April 2000 Mutual Funds, which named it a "great financial planning Website." Most recently, Vanguard's Website was designated "Best of the Web" by Forbes in the mutual fund category. Vanguard was also included as one of CIO magazine's CIO-100 technology honorees, and was the only company focusing on mutual funds to receive this honor.

Leadership position. While Vanguard is well known in the retail market, it is also a leader in providing investment management and related services for company-sponsored retirement plans. In fact, more than $280 billion, or about half of Vanguard's assets under management, are invested by some 7,100 institutions, including corporate and nonprofit pension and profit-sharing plans, endowments, foundations, and bank trust departments.

Vanguard has a global workforce of some 11,000, 8,500 of whom work in Chester County, PA. Vanguard has offices in Valley Forge; Scottsdale, AZ; Charlotte, NC; and offices in Waterloo, Belgium, and Melbourne, Australia, through which it serves European and Australian pension plan and other clients.