23
Morningstar FundInvestor
December
2013
Morningstar Analyst Rating
11-15-13
´
Morningstar Pillars
Process
Performance
People
Parent
Price
¶
¶
Neutral
Neutral
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
19.38
17.62
16.61
17.26
15.92
13.68
. . . . . .
Total Return %
14.66
11.02
0.69
13.67
23.51
. . . . . . .
+/-M* MdTgRk
1.47
-1.02
0.10
1.34
1.74
. . . . . . .
+/-Mstar Mod Inc
8.47
2.24
-3.44
3.65
8.00
. . . . . . .
Income Return %
4.48
4.86
4.59
4.89
6.31
. . . . . . .
Capital Return %
10.18
6.16
-3.90
8.78
17.20
. . . . . . .
Total Rtn % Rank Cat
9
22
60
4
13
. . . . . . .
Income $
0.77
0.79
0.78
0.76
0.84
0.67
. . . . . .
Capital Gains $
0.00
0.00
0.00
0.00
0.00
0.00
. . . . . .
Expense Ratio %
0.22
. . . . . . . . . . .
Income Ratio %
.
1.96
1.97
1.98
2.81
. . . . . . .
Turnover Rate %
.
32
33
44
50
73
. . . . . .
Net Assets $mil
577
373
293
256
178
115
. . . . . .
Performance
11-30-13
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2009
2010
2011
2012
2013
-7.24 13.52 12.26 4.48 23.51
2.91 -6.79 10.86 6.90 13.67
4.69 0.71 -10.51 6.71
0.69
8.08 -2.37
4.38 0.80 11.02
5.82 -0.67
4.88
. .
Trailing
Total
+/- M* +/- Mstar
%Rank Growth of
Return% MdTgRk Mod Inc
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
7.43 0.74
3.39
3 10,743
6.84 0.45
3.56
8 10,684
16.01 1.52
9.50
7 11,601
10.36 0.41
3.16
4 13,441
13.26 0.75
3.74
13 18,637
. . . . .
. . . . .
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
8.87
7
1.35
85
11.69
16
1.38
91
. . . .
Potential Capital Gain Exposure: 12% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
16.01
3 Yr
10.36
High
High
5 Yr
13.26
+Avg
High
10 Yr
. . . .
Incept
4.54
Other Measures
Standard Index
Best Fit Index
M* MdTgRk Mstr Lft Mod 2025
Alpha
-0.9
-0.4
Beta
1.15
0.95
R-Squared
98
98
Standard Deviation
9.71
Mean
10.36
Sharpe Ratio
1.06
Morningstar’s Take
by Josh Charlson 11-15-13
Vanguard Managed Payout Growth & Distribution’s
reduced payout level may pave the way to prolonged
success.
In early 2014, Vanguard’s two other
managed-payout options will merge into this one,
which will be renamed simply Vanguard Managed
Payout; its distribution rate will be reduced to 4% from
its current 5%. This distribution level (based on a
hypothetical account value for the previous three
calendar years), is a realistic accommodation to the
changed expectations for capital markets since the
fund’s 2008 debut, which include lower yields and
reduced return expectations for stocks and bonds.
Other aspects of the fund’s design remain
unchanged. It maintains an aggressive-allocation
posture relative to peers in order to fund the ongoing
payment stream. Vanguard’s experienced
asset-allocation team uses what it calls a
"miniendowment" approach with these funds,
incorporating significant allocations to REITs,
commodities, and a market-neutral strategy. Those
exposures come primarily via sturdy index funds, along
with a commodity swap. The recent net equity
exposure of around 76% is more than double the
retirement-income category’s average 30% allocation
and higher than most managed-payout fund peers and
even the average moderate-allocation fund.
The fund’s total-return patterns reflect this
construction. This fund’s 11.8% five-year return
through Oct. 31, 2013, ranks in the top 15% of the
retirement-income category and is on par with the
average moderate-allocation fund. The fund has
exhibited higher volatility than peers, however.
In theory, the diversified sources of return the fund
relies on will, over the long term, smooth out its
risk/return profile. But investors shouldn’t imagine this
fund is like an annuity; it can lose money in a given
year, and its payments will vary based on market
performance. Still, the familiar Vanguard cost
advantage, and the sound indexing and
asset-allocation expertise of management, all tilt in
the fund’s favor.
Address:
P O Box 2600
Valley Forge, PA 19482
800-662-7447
Web Address:
Inception:
05-02-08
Advisor:
Vanguard Group, Inc.
Subadvisor:
None
NTF Plans:
Vanguard NTF
Minimum Purchase:
$25000
Add: $100 IRA: $0
Min Auto Inv Plan:
$0
Add:
.
Sales Fees:
No-load
Management Fee:
.
Actual Fees:
Mgt:0.00% Dist:
.
Expense Projections:
3Yr:$138
5Yr:$241 10Yr:$542
Income Distribution:
Monthly
Data through November 30, 2013
Vanguard Managed Payout Gr & Dis Inv
Ticker
Status Yield Total Assets
Mstar Category
VPGDX Open
4.3% $577 mil
Retirement Income
68% 64% 76% 65% 76% 76%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 11-13
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
M* MdTgRk
Performance Quartile
(within Category)
History
10.0
6.0
8.0
12.0
Portfolio Analysis
09-30-13
Total Stocks:0
P/E
YTD % Net
Share change since 06-30-13
Sectors
Ratio Return % Assets
Vanguard Total Stock Mkt Idx Inv
.
29.93 39.72
Vanguard Total Intl Stock Index Inv
.
13.63 22.10
Vanguard Market Neutral Inv
.
8.50 10.16
Qif Portfolio 02
. .
7.86
Vanguard Total Bond Market II Idx Inv
.
-1.57 7.02
Vanguard Interm-Term Invmt-Grade Inv
.
-0.83 5.21
Vanguard REIT Index Inv
.
2.04 5.06
Vanguard Total Intl Bd Idx Investor
. .
2.89
CMT Market Liquidity Rate
. .
0.00
Date of
Amount
Value % Net
Total Fixed-Income:0
Maturity
$000
$000 Assets
Equity Style
Fixed-Income Style
Style: Blend
Size: Large-Cap
Duration: Moderate
Quality:
Medium
Avg Eff Duration
5.6 Yrs
Avg Eff Maturity
7.2 Yrs
Avg Credit Quality
A
Avg Wtd Coupon
3.64%
figure provided by fund as of 09-30-13
1
1
Value Measures
Rel Category
Price/Earnings
Price/Book
Price/Sales
Price/Cash Flow
Dividend Yield %
15.32
1.88
1.13
6.34
2.33
1.04
0.99
0.92
0.94
1.01
Growth Measures
% Rel Category
Long-Term Erngs
Book Value
Sales
Cash Flow
Historical Erngs
8.30
-15.52
-13.92
-7.82
-11.44
0.80
NMF
NMF
NMF
NMF
Market Cap %
Giant 36.1
Large 29.3
Mid 22.3
Small
10.6
Micro
1.7
Avg $mil:
21,105
Composition - Net
(% of Stock)
Cash
0.8
Stocks 76.3
Bonds 14.5
Other
8.3
Foreign 29.6
Sector
Weightings
% of
Stocks
Rel M*
MdTgRk High
3 Year
Low
Cyclical 42.08 1.08
BasicMat 5.22 0.90 6 5
CnsmrCyc11.62 1.01 12 9
FinanSvs 15.90 0.88 16 12
Real Est 9.34 2.50 16 9
Sensitive 36.57 0.97
CommSrvs 3.61 0.94 4 3
Energy 8.09 0.91 9 8
Industrl 12.01 0.95 12 11
Technlgy 12.86 1.04 13 12
Defensive21.36 0.92
CnsmrDef 8.38 0.95 9 7
Hlthcare 9.85 0.96 10 8
Utilities 3.13 0.77 4 3
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2013Morningstar, Inc.All rights reserved. The information herein isnot represented orwarranted to be accurate, correct, complete or
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