7
Morningstar FundInvestor
May 2
013
Morningstar Analyst Rating
04-12-13
Œ
Morningstar Pillars
Process
Performance
People
Parent
Price
Positive
Positive
Positive
Positive
Positive
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ˇ ¨
Pillar Spectrum
Positive
§
Negative
¶
Neutral
NAV
40.04
33.62
29.51
33.24
30.04
20.24
36.82
36.68
33.03
30.77
25.41
17.00
Total Return %
19.10
18.37
-6.18
11.06
48.91
-39.08
10.58
16.78
8.27
21.65
49.55
-27.94
+/-S&P 500
6.36
2.37
-8.29
-4.00
22.45
-2.08
5.09
0.99
3.36
10.77
20.87
-5.84
+/-Russ 1000Gr
7.23
3.11
-8.82
-5.65
11.70
-0.64
-1.23
7.71
3.01
15.35
19.80
-0.06
Income Return %
0.00
1.30
0.48
0.40
0.48
0.31
0.75
0.30
0.18
0.28
0.08
0.06
Capital Return %
19.10
17.07
-6.66
10.66
48.43
-39.39
9.83
16.48
8.09
21.37
49.47
-28.00
Total Rtn % Rank Cat
1
18
84
86
9
39
71
8
65
3
9
94
Income $
0.00
0.39
0.16
0.12
0.10
0.11
0.27
0.10
0.06
0.07
0.01
0.01
Capital Gains $
0.00
0.93
1.47
0.00
0.00
2.06
3.39
1.83
0.23
0.07
0.00
0.00
Expense Ratio %
.
0.48
0.48
0.48
0.50
0.45
0.45
0.49
0.51
0.52
0.59
0.58
Income Ratio %
.
0.67
0.45
0.36
0.50
0.67
0.18
0.15
0.33
0.06
0.05
0.07
Turnover Rate %
.
9
9
8
12
13
14
11
12
10
14
14
Net Assets $mil
2,732
2,384
2,487
3,158
4,184
2,795
4,977
5,268
5,203
6,962
5,455
3,275
Performance
04-30-13
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2009
2010
2011
2012
2013
0.25 17.20 16.53 8.77 48.91
5.13 -15.61 11.03 12.75 11.06
5.29 -1.57 -18.23 10.70 -6.18
11.35 -4.35
5.70 5.15 18.37
16.18
. . . .
Trailing
Total
+/-
+/- Russ %Rank Growth of
Return% S&P 500 1000Gr
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
10.64 3.46
3.37
1 11,064
26.99 12.57 13.28
1 12,699
29.44 12.55 16.84
1 12,944
11.56 -1.24
-1.88
37 13,884
6.90 1.69
0.24
12 13,960
12.22 4.34
4.14
1 31,674
12.57 8.24
9.27
1 59,066
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
11.03
36
0.48
84
6.27
15
0.59
92
11.62
2
0.54
83
Potential Capital Gain Exposure: 47% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
29.44
3 Yr
11.56
Avg
+Avg
5 Yr
6.90
+Avg
High
10 Yr
12.22
High
High
Incept
11.58
Other Measures
Standard Index
Best Fit Index
S&P 500
M* U.S. Core TR
Alpha
-2.9
-4.6
Beta
1.17
1.18
R-Squared
93
96
Standard Deviation
18.22
Mean
11.56
Sharpe Ratio
0.69
Morningstar’s Take
by David Kathman, CFA 04-12-13
Vanguard Capital Opportunity’s reopening is good news
for investors.
On April 3, 2013, nine years after this fund closed to
new investors, Vanguard announced that it is
reopening the fund to individuals and removing the
$25,000 annual limit on additional purchases. The fund,
which has seen $2.6 billion in net outflows over the
past three years, will remain closed to advisor,
institutional, and intermediary clients, other than those
who invest through a Vanguard brokerage account.
Investors have reason to cheer this development,
because this is one of the best large-growth funds out
there, with rock-bottom expenses and 10- and 15-year
returns that rank in the category’s top 1%. It’s run by
the Primecap team, which has put up stellar numbers
since 1984 with Vanguard Primecap VPMCX (which
remains closed to new investors), since 1998 with this
fund, and since 2004 with four other funds. Like its
siblings, this fund uses a contrarian growth strategy
focused on companies with good growth potential but
temporarily depressed valuations, and has very low
turnover due to the managers’ long-term perspective.
This fund differs from Vanguard Primecap mainly in
holding significantly more mid- and small-cap stocks.
The managers’ contrarian bent and willingness to
make sector bets mean that it’s not uncommon for this
fund to be out of sync with the market for a while, but
it has always bounced back. It landed in the
large-growth category’s bottom quartile in both 2010
and 2011, due partly to its big stake in struggling
pharma and biotech stocks such as Amgen AMGN
and Eli Lilly LLY, and partly to the implosion of some
top holdings, notably Research in Motion BBRY and
Cree CREE. These same stocks have been among the
biggest drivers as the fund has come roaring back,
with a top-quartile finish in 2012 and the category’s
best one-year returns as of April 10, 2013.
The last time this fund reopened to new investors,
in early 2001, it remained open for three years. There’s
no telling how long Vanguard will keep it open this
time, so newcomers thinking of making the plunge
shouldn’t dawdle.
Address:
P O Box 2600
Valley Forge, PA 19482
800-662-7447
Web Address:
Inception:
08-14-95
Advisor:
PRIMECAP Management Company
Subadvisor:
None
NTF Plans:
Vanguard NTF
Minimum Purchase:
$3000
Add: $100 IRA: $3000
Min Auto Inv Plan:
$0
Add:
.
Sales Fees:
No-load
Management Fee:
0.50% mx./0.15% mn.
Actual Fees:
Mgt:0.46% Dist:
.
Expense Projections:
3Yr:$154
5Yr:$269 10Yr:$604
Income Distribution:
Annually
Data through April 30, 2013
Vanguard Capital Opportunity Inv
Ticker
Status Yield Total Assets
Mstar Category
VHCOX Open
0.9% $9,037 mil
Large Growth
97% 98% 96% 97% 96% 97% 97% 98%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 04-13
Historical Profile
Return
Risk
Rating
Above Avg
High
Above Avg
Investment Style
Equity
Stock %
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
S&P 500
Performance Quartile
(within Category)
History
10.0
6.0
14.0
18.0
22.0
Portfolio Analysis
12-31-12
Share change since 09-12 Total Stocks:123 Sector
PE Tot Ret% % Assets
Biogen Idec Inc
Hlth care 34.7 49.57 5.95
Amgen Inc
Hlth care 18.9 21.44 5.88
Eli Lilly and Company
Hlth care 13.4 13.28 4.48
Roche Holding AG
Hlth care 23.6 25.01 4.21
FedEx Corporation
Industrl
16.4 2.65 3.33
Biomarin Pharmaceutical,
Hlth care
.
33.33 3.11
Google, Inc. Class A
Technology 23.8 16.57 2.90
Monsanto Company
Basic Mat 22.9 13.65 2.88
Altera Corp.
Technology 18.4 -6.63 2.66
Novartis AG ADR
Hlth care 19.0 19.02 2.61
Medtronic, Inc.
Hlth care 14.3 14.43 2.55
CarMax, Inc.
Cnsmr Cyc 24.6 22.64 2.20
Symantec Corp
Technology 15.3 29.12 2.06
Adobe Systems Inc
Technology 31.9 19.64 2.04
Trimble Navigation Ltd.
Technology 38.6 -3.85 1.94
ASML Holding NV ADR
Technology 25.2 16.43 1.89
Life Technologies Corp
Hlth care 30.7 50.30 1.86
Texas Instruments, Inc.
Technology 24.0 18.81 1.85
Cree, Inc.
Technology 117.7 66.48 1.77
Directv
Comm Svs 12.4 12.76 1.71
Current Investment Style
Market Cap %
Giant
24.2
Large
35.5
Mid
35.9
Small
3.4
Micro
0.9
Avg $mil:
19,730
Value Blnd Growth
Large Mid Small
Value Measures
Rel Category
Price/Earnings
Price/Book
Price/Sales
Price/Cash Flow
Dividend Yield %
15.70
2.41
1.48
8.80
1.01
0.92
0.85
0.84
0.91
0.74
Growth Measures
% Rel Category
Long-Term Erngs
Book Value
Sales
Cash Flow
Historical Erngs
11.69
7.16
7.92
8.18
4.99
0.87
0.69
0.94
0.61
0.35
Profitability
% Rel Category
Return on Equity
Return on Assets
Net Margin
17.56
7.75
12.78
0.82
0.77
0.88
Sector
Weightings
% of
Stocks
Rel
S&P 500 High
3 Year
Low
Cyclical 13.24 0.46
BasicMat 2.92 0.95 4 2
CnsmrCyc 7.89 0.92 11 7
FinanSvs 2.43 0.15 2 0
Real Est 0.00 0.00
. .
Sensitive 49.42 1.13
CommSrvs 2.65 0.66 5 3
Energy 2.19 0.20 6 2
Industrl 12.00 1.06 15 11
Technlgy 32.58 1.86 39 32
Defensive37.33 1.35
CnsmrDef 0.00 0.00 1 0
Hlthcare 36.95 3.13 37 23
Utilities 0.38 0.11 1 0
h
r
t
y
u
j
i
o
p
a
k
s
d
f
Composition - Net
(% of Stock)
Cash
1.5
Stocks 98.4
Bonds 0.0
Other
0.2
Foreign 14.8
©
2013Morningstar, Inc.All rights reserved. The information herein isnot represented orwarranted to be accurate, correct, complete or
timely. Pastperformance isnoguarantee of future results.Access updated reports at
To order reprints, call 312-696-6100.
mfb.morningstar.com.
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