[SHIP LOGO] [VANGUARD (R) LOGO]
P.O. Box 2600
Valley Forge, PA 19482-2600
610-669-1538
Judy_L_Gaines@vanguard.com
April 3, 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 Institutional Index Fund
Dear Mr. Sandoe:
The following responds to your comments of March 31, 2006 on the post-effective
amendment of the registration statement of the above-referenced registrant. You
commented on Post-Effective Amendment No. 43 that was filed on February 16,
2006.
Comment 1: Prospectus - Frequent Trading or Market Timing
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Comment: Each 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 each 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 each Fund's policies against frequent trading
and market-timing are properly disclosed in the prospectus
pursuant 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 each 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.
April 3, 2006
Page 2
Comment 2: Prospectus - Back Cover
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Comment: Clarify that the shareholder reports and the SAI are available
at no charge at Vanguard's website.
Response: We will add the requested clarification.
Comment 3: Institutional Total Stock Market Index Fund and Total Stock
Market Index Fund - Primary Investment Strategy
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Comment: Include the market capitalization range of the Fund's target
benchmark.
Response: We have considered the comment but do not plan to add the
requested disclosure. Form N-1A does not specifically
require that a market capitalization range be part of a fund's
primary investment strategy disclosure. This particular fund
discloses its strategy of tracking its target index that
represents the performance of the entire market. The fund
replicates the index by investing most of its assets in the
index's largest 1200-1300 stocks, and it samples the remaining
stocks. As a result, like the index, the fund has a market
capitalization range that spans the market in its entirety.
As such, we do not think the requested disclosure is material
in determining whether to invest in the Fund.
Comment 4: Extended Market Index Fund - Primary Risks
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Comment: Include disclosure about the risks of small- and mid-cap
stocks.
Response: In the Investment Style Risk section we disclose that the
small- and mid-cap stocks held by the Fund could trail the
returns of the overall market. We also includes small- and
mid-cap risk disclosure with respect to this Fund in the Item
4 disclosure. We are satisfied that the level of disclosure
currently in the prospectus is sufficient.
Comment 5: Tandy Requirements
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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.
April 3, 2006
Page 3
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