(PUB) Vanguard Advisor

stake, aswell as “a portion of new cash flow over time.” SelectedValue is one of the few active funds atVanguard that has had consistent cash inflows over the last year, with about $1.9 billion of net new cash coming in over the past 12months. For those of you interested in keep- ing score, I first added Selected Value to my Model Portfolios in May 1999, when I sold Windsor II to fund the stake. You and I added to that posi-

once again muddying the waters of a good stock fund by adding yet a third management team to Selected Value , the $8.5 billion mid-cap fund that per- formedworseunder twomanagers than under one, and presumably will not see any improvement under three. Of course, with only one Vanguard direc- tor owning shares in the fund, thismay not cut as close to the board’s interests as shareholdersmight have hoped. Pzena Investment Management is going to be building a portfolio from some of the fund’s current 5.8% cash

RATIONAL FROMPAGE1 >

Even the bondmarketmaybe acting rationally. After soaring over 3%, the yieldon the10-yearTreasuryhasmoved back intoa trading rangebetweenabout 2.6% and 2.8%. Inflation is nowhere to be found; the Fed continues on a slow taper; and short rates won’t rise for at least another 13 or 14months, accord- ing to a parsing of Fed Chief Janet Yellen’s latest statements. RationalVanguard Vanguard filed a request with the SEC for “exemptive relief” that would allow it tooffer activelymanagedETFs (essentially,ETF sharesof active funds) if and when it wishes to do so. This pretty much moves Vanguard off the benchandonto the sidelines, but I don’t think they’ll actually get into the game of actively managed ETFs. Of course, stranger things have happened, and one thing I’ve learned is you never say never in this business. On a somewhat broader note, it appears theSEC isgoing toacquiesce to thedemands ofmany investors and fund companies and essentially continue to allowmoney funds aimedat retail inves- tors tomaintain a$1 shareprice, regard- less of whether the underlying portfolio has deviated slightly from that value—a debate that has raged since the financial crisis. I’ve said all along that the $1 sharepricewas an important andneeded characteristic of retailmoney funds, and I guess themessage finally got through. This is awin for you andme. IrrationalVanguard In a typical Vanguard move, the firm announced on Mar. 31 that it is

SEE RATIONAL PAGE16

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MARCHSPECIALDISTRIBUTIONS

Pacific Index

$0.018 @ $10.90 $0.453 @ $69.96 $0.142 @ $23.04 $0.331 @ $85.90 $0.300 @ $88.03 $0.388 @ $83.51 $0.322 @ $86.19 $0.779 @ $170.13 $0.249 @ $88.71 $0.407 @ $82.77 $0.009 @ $112.80 $0.017 @ $124.71 $0.003 @ $35.09 $0.001 @ $53.98 $0.024 @ $100.17 $0.004 @ $23.97 $0.093 @ $18.23 $0.069 @ $14.50 $0.048 @ $12.61 $0.106 @ $9.97 $0.128 @ $25.27 $0.009 @ $95.49 $0.386 @ $83.28 $0.367 @ $51.18 $0.115 @ $16.26 $0.423 @ $97.10 $0.192 @ $47.08 $0.334 @ $58.88 $0.131 @ $23.85 $0.731 @ $89.33 $0.366 @ $44.41 $0.430 @ $77.43 $0.157 @ $30.03 $0.222 @ $25.20 $0.243 @ $38.38 $0.394 @ $49.23 $0.148 @ $19.22

500 Index

$0.734 @ $172.04 $0.128 @ $27.77 $0.068 @ $14.05 $0.429 @ $40.51 $0.329 @ $74.65 $0.122 @ $29.81 $0.051 @ $21.40 $0.105 @ $39.49 $0.055 @ $24.59 $0.217 @ $67.18 $0.225 @ $29.98 $0.878 @ $58.15 $0.460 @ $30.83 $0.769 @ $99.91 $0.018 @ $84.79 $0.013 @ $64.32 $0.113 @ $45.55 $0.057 @ $22.82 $0.275 @ $93.61 $0.125 @ $48.07 $8.448 @ $194.61 $0.401 @ $62.69 $0.154 @ $24.63 $0.008 @ $13.23 $0.375 @ $85.69 $0.138 @ $34.46 $0.056 @ $18.70 $0.276 @ $63.49 $0.198 @ $71.87 $0.302 @ $55.74 $0.024 @ $112.91 $0.011 @ $92.46 $0.002 @ $36.36 $0.005 @ $30.76 $0.019 @ $81.93 $0.004 @ $32.15 $0.115 @ $57.53

REIT ETF

Balanced Index

REIT Index

Convertible Securities DevelopedMarkets ETF DividendAppreciation ETF DividendAppreciation Index

Russell 1000 ETF

Russell 1000Growth ETF Russell 1000 Value ETF

Russell 3000 ETF

DividendGrowth

S&P 500 ETF

EmergingMarkets Stock ETF EmergingMarkets Stock Index

S&P 500Growth ETF S&P 500 Value ETF

Energy

SmallCap ETF

Equity Income

SmallCapGrowth ETF SmallCapGrowth Index

Europe ETF

European Index

SmallCap Index

Extended-Duration Treasury ETF

SmallCap Value ETF SmallCapValue Index

ExtendedMarket ETF ExtendedMarket Index

STARCons. Gro.

Financials ETF Financials Index Growth ETF Growth Index Health Care

STAR Income

Target Retirement Income Tax-Managed International

T-MBalanced

T-MCapital Appreciation T-MGrowth& Income Total International StockETF Total International Stock Index

HighDividend Yield ETF HighDividend Yield Index Inflation-Protected Securities

LargeCap ETF LargeCap Index Managed Payout

Total StockMarket ETF Total StockMarket Index TotalWorldStockETF TotalWorldStock Index

MegaCap ETF

MegaCapGrowth ETF MegaCap Value ETF

UtilitiesETF Utilities Index ValueETF Value Index

MidCap ETF

MidCapGrowth ETF MidCapGrowth Index

Wellesley Income

MidCap Index

Wellington

MidCap Value ETF MidCap Value Index

Worldex-U.S. ETF Worldex-U.S. Index

Pacific ETF

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