Common use of Investment Strategy Clause in Contracts

Investment Strategy. The Active Conservative Portfolio maintains a target asset allocation of 25% equity, 75% fixed income. This target asset allocation is comprised of the following Sub-asset Classes and Funds: 7.5% allocation large-cap domestic equity, managed by The Vanguard Group, Inc.; 1.25% small-cap domestic equity, managed by The Vanguard Group, Inc.; 1.25% small-/mid-cap domestic equity, managed by Rothschild Asset Management Inc.; 3.75% international equity, managed by Capital Research and Management Co.; 3.75% international equity managed by Wellington Management Company LLP; 1.25% emerging markets equity, managed by Sands Capital Management, LLC; 1.25% emerging markets equity, managed by DFA Investment Dimensions Group, Inc.; 5% private real estate/U.S. Real Estate, managed by UBS Realty Advisors LLC, Blackstone Property Advisors L.P., and The Vanguard Group, Inc.; 5% high yield bonds, managed by PGIM Fixed Income; 10% emerging markets debt, managed by Stone Harbor Investment Partners, LP; 20% Market Fixed Income, managed by The Vanguard Group, Inc.; and 40% Stable Value, managed by Invesco Advisers, Inc. The majority of the underlying allocations of the Active Conservative Portfolio employ an Active Management strategy. A full description of each underlying Fund’s investment strategy can be found in the Target Enrollment Portfolios section of this document. Investment Risks A complete description of each of the risks associated with the underlying Funds of the Active Conservative Portfolio can be found in the Target Enrollment Portfolios section of this document. Information on obtaining prospectuses for the respective Funds is also contained in that section. International Fixed Income Vanguard® Total International Bond Index Fund (the “Total International Bond Index Fund”) seeks to track the performance of a benchmark index that measures the investment return of non-U.S. dollar-denominated investment-grade bonds. The Total International Bond Index Fund employs an indexing investment approach designed to track the performance of the Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged). This Index provides a broad-based measure of the global, investment-grade, fixed-rate debt markets. The Index includes government, government agency, corporate, and securitized non-U.S. investment-grade fixed income investments, all issued in currencies other than the U.S. dollar and with maturities of more than one year. The Index is capped to comply with investment company diversification standards of the Internal Revenue Code, which state that, at the close of each fiscal quarter, a fund’s (1) exposure to any particular bond issuer may not exceed 25% of the fund’s assets, and (2) aggregate exposure to issuers that individually constitute 5% or more of the fund may not exceed 50% of the fund’s assets. To help enforce these limits, if the Index, on the last business day of any month, were to have greater than 20% exposure to any particular bond issuer, or greater than 48% aggregate exposure to issuers that individually constitute 5% or more of the Index, then the excess would be reallocated to bonds of other issuers represented in the Index. The Index methodology is not designed to satisfy the diversification requirements of the Investment Company Act of 1940. The Total International Bond Index Fund will attempt to hedge its foreign currency exposure, primarily through the use of foreign currency exchange forward contracts, in order to correlate to the returns of the Index, which is U.S. dollar hedged. Such hedging is intended to minimize the currency risk associated with investment in bonds denominated in currencies other than the U.S. dollar. The Total International Bond Index Fund invests by sampling the Index, meaning that it holds a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. All of the Total International Bond Index Fund’s investments will be selected through the sampling process and, under normal circumstances, at least 80% of the Fund’s assets will be invested in bonds included in the Index. The Total International Bond Index Fund maintains a dollar-weighted average maturity consistent with that of the Index. Vanguard Total International Bond Index Fund is subject to country/regional risk, interest rate risk, income risk, nondiversification risk, credit risk, index sampling risk, currency risk, currency hedging risk, call risk, and derivatives risk. Please refer to the Total International Bond Index Fund’s prospectus prior to investing for Vanguard’s full description of these risks at xxxx://xxx.xx/1YLgLwh or call Virginia529 to have a prospectus printed from the manager’s site and mailed to you.

Investment Strategy. The Active Conservative Aggressive Portfolio maintains a target asset allocation of 2580% equity, 7520% fixed income. This target asset allocation is comprised of the following Sub-asset Classes and Funds: 7.517.5% allocation large-cap domestic equity, managed by The Vanguard Group, Inc.; 1.253.75% small-cap domestic equity, managed by The Vanguard Group, Inc.; 1.2511.25% small-/mid-cap domestic equity, managed by Rothschild Asset Management Inc.; 3.758.75% international equity, managed by Capital Research and Management Co.; 3.758.75% international equity managed by Wellington Management Company LLP; 1.257.5% emerging markets equity, managed by Sands Capital Management, LLC; 1.257.5% emerging markets equity, managed by DFA Investment Dimensions Group, Inc.; 515% private real estate/U.S. Real Estate, managed by UBS Realty Advisors Investors LLC, Blackstone Property Advisors L.P., L.P. and The Vanguard Group, Inc.; 5% high yield bonds, managed by PGIM Fixed Income; 105% emerging markets debt, managed by Stone Harbor Investment Partners, LP; 207.5% Market Fixed Income, managed by The Vanguard Group, Inc.; and 402.5% Stable Value, managed by Invesco Advisers, Inc. The majority of the underlying allocations of the Active Conservative Aggressive Portfolio employ an Active Management strategy. A full description of each underlying Fund’s investment strategy can be found in the Target Enrollment Portfolios section of this document. Investment Risks A complete description of each of the risks associated with the underlying Funds of the Active Conservative Aggressive Portfolio can be found in the Target Enrollment Portfolios section of this document. Information on obtaining prospectuses for the respective Funds is also contained in that section. International Fixed Income Vanguard® Total International Bond Index Fund (the “Total International Bond Index Fund”) seeks to track the performance of a benchmark index that measures the investment return of non-U.S. dollar-denominated investment-grade bonds. The Total International Bond Index Fund employs an indexing investment approach designed to track the performance of the Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged). This Index provides a broad-based measure of the global, investment-grade, fixed-rate debt markets. The Index includes government, government agency, corporate, and securitized non-U.S. investment-grade fixed income investments, all issued in currencies other than the U.S. dollar and with maturities of more than one year. The Index is capped to comply with investment company diversification standards of the Internal Revenue Code, which state that, at the close of each fiscal quarter, a fund’s (1) exposure to any particular bond issuer may not exceed 25% of the fund’s assets, and (2) aggregate exposure to issuers that individually constitute 5% or more of the fund may not exceed 50% of the fund’s assets. To help enforce these limits, if the Index, on the last business day of any month, were to have greater than 20% exposure to any particular bond issuer, or greater than 48% aggregate exposure to issuers that individually constitute 5% or more of the Index, then the excess would be reallocated to bonds of other issuers represented in the Index. The Index methodology is not designed to satisfy the diversification requirements of the Investment Company Act of 1940. The Total International Bond Index Fund will attempt to hedge its foreign currency exposure, primarily through the use of foreign currency exchange forward contracts, in order to correlate to the returns of the Index, which is U.S. dollar hedged. Such hedging is intended to minimize the currency risk associated with investment in bonds denominated in currencies other than the U.S. dollar. The Total International Bond Index Fund invests by sampling the Index, meaning that it holds a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. All of the Total International Bond Index Fund’s investments will be selected through the sampling process and, under normal circumstances, at least 80% of the Fund’s assets will be invested in bonds included in the Index. The Total International Bond Index Fund maintains a dollar-weighted average maturity consistent with that of the Index. Vanguard Total International Bond Index Fund is subject to country/regional risk, interest rate risk, income risk, nondiversification risk, credit risk, index sampling risk, currency risk, currency hedging risk, call risk, and derivatives risk. Please refer to the Total International Bond Index Fund’s prospectus prior to investing for Vanguard’s full description of these risks at xxxx://xxx.xx/1YLgLwh or call Virginia529 to have a prospectus printed from the manager’s site and mailed to you.