(PUB) Vanguard Advisor

increase is good, but if most employees’ payouts are capped, as I’ve been told they are, then the real windfall lands on the handful of managers at the very top of the Vanguard pyramid. For those who want to see more on the subject of the Partnership Plan , I rec- ommend the updated version of Lewis Braham’s book, The House that Bogle Built , which goes into some detail on the Vanguard plan and some of the more controversial aspects of how “profits” at this “non-profit” are calculated. n

Interestingly, Jack Bogle, who took great umbrage at having his compensa- tion calculated so many years ago by yours truly, has had quite the change of heart. In fact, he told Reuters in May that leaders of mutual fund firms, including Vanguard, should disclose their compen- sation. I couldn’t agree more—but I’m not going to hold my breath. Finally, last year, I said I thought 2013’s Partnership Plan payout could reflect another windfall, given the strong asset growth at the firm. A 12% >

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JUNE SPECIAL DISTRIBUTIONS

STAR Income

$0.076

Growth

$0.275 $0.476 $0.394 $0.306 $0.256 $0.316 $0.472 $0.695 $0.392 $0.365 $0.453 $0.383 $0.809 $0.339 $0.435 $0.604 $0.420 $0.463 $0.743 $0.454 $0.610 $0.748

Funds 500 Index

STAR Mod. Growth $0.245 Target Retirement Income $0.056 Total Int’l Stock Index $0.191 Total Stock Market Index $0.190 Total World Stock Index $0.183 Utilities Index $0.373 Value Index $0.166 Wellesley Income $0.181 Wellington $0.234 Windsor $0.145 Windsor II $0.453 World ex-U.S. Index $0.233 World ex-U.S. SmallCap Index $0.249

High Dividend Yield

$0.762 $0.125 $0.117 $0.073

LargeCap MegaCap

Admiral T-M Balanced

Balanced Index

MegaCap Growth MegaCap Value

Convertible Securities Developed Markets Index $0.125 Dividend Appreciation Index $0.156 Dividend Growth $0.199 Emerging Markets Stock Index $0.252 Equity Income $0.195 European Index $0.516 Financials Index $0.119 Global ex-U.S. R.E. Index $0.122 Growth & Income $0.317 Growth Index $0.124 High Dividend Yield Index $0.183 Inflation-Protected Securities $0.112 LargeCap Index $0.148 Pacific Index $0.085 REIT Index $0.223 STAR $0.187 STAR Cons. Gro. $0.100 STAR Growth $0.302

Pacific

REIT

Russell 1000

Russell 1000 Growth Russell 1000 Value

Russell 3000

S&P 500

S&P 500 Growth S&P 500 Value

ETFs Developed Markets Dividend Appreciation Emerging Markets Stock

Total International Stock

Total Stock Market Total World Stock

$0.513 $0.408 $0.418 $0.984 $0.878 $0.237 $0.352

Utilities

Value

Europe

World ex-U.S.

Extended Duration Treasury

World ex-U.S. SmallCap

Financials

Global ex-U.S. Real Estate

DAN’S DO-IT-NOW ACTION RECOMMENDATIONS 4 Vanguard keeps adding managers to funds and then celebrating their predictably index-like perfor- mance. But I’d steer clear of the likes of Explorer and Morgan Growth . (See pages 1 and 14) 4 Vanguard’s foreign bond index funds may now have a year under their belts, but there’s still no need to pile into either Emerging Markets Government Bond or Total International Bond . (See page 12) 4 Reinvestment is what saves bond investors in a rising interest rate environment. And do you really need Inflation-Protected Securities ? (See page 4)

Daniel P. Wiener is America’s leading expert on the Vanguard family of funds. He is founder of the Fund Family Shareholder Association and chairman and chief executive officer of Adviser Investments, LLC, a Newton, Massachusetts, investment advisory firm (800-492-6868). As

Jeffrey D. DeMaso, Editor/Director of Research, works directly with Dan Wiener researching and writing the multiple-award winning Independent Adviser for Vanguard Investors newsletter. He also leads the analyst team for Adviser Investments, LLC, helping to

editor of The Independent Adviser for Vanguard Investors , he is a five-time recipient of the Newsletter Publishers Foundation’s Editorial Excellence Award. He also edits the annual Independent Guide to the Vanguard Funds. Mr. Wiener is often quoted in the nation’s leading financial publications.

oversee $2.7 billion in assets. Jeff graduated magna cum laude from Tufts University with a B.A. in economics in 2006, holds the Chartered Financial Analyst designation and is a member of the CFA Institute and the Boston Security Analysts Society.

16 • Fund Family Shareholder Association

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