(PUB) Investing 2015

Morningstar Analyst Rating

06-11-15

„

Morningstar Pillars

Process

Performance

People

Parent

Price

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

26.67

27.22

24.69

19.54

17.91

16.72

15.06

13.26

20.31

20.49

. .

Total Return %

-0.59

13.38

30.13

12.59

10.35

14.02

17.52

-32.51

1.54

. . .

+/-S&P 500

-1.82

-0.31

-2.26

-3.41

8.24

-1.04

-8.94

4.49

-3.95

. . .

+/-Russ 1000 Vl

0.02

-0.07

-2.40

-4.92

9.96

-1.49

-2.17

4.34

1.71

. . .

Income Return %

1.46

3.01

3.49

3.46

3.07

2.79

3.40

2.72

2.51

. . .

Capital Return %

-2.05

10.37

26.64

9.13

7.28

11.23

14.12

-35.23

-0.97

. . .

Total Rtn % Rank Cat

. . .

Income $

0.40

0.74

0.67

0.61

0.51

0.42

0.44

0.55

0.51

0.07

. .

Capital Gains $

0.00

. .

Expense Ratio %

0.18

0.19

0.20

0.25

0.30

0.35

0.40

. . .

Income Ratio %

2.92

3.10

3.22

3.04

2.86

3.63

3.41

2.43

. . .

Turnover Rate %

. . .

Net Assets $mil

4,385

4,279

3,191

1,655

908

388

168

. .

Performance

06-30-15

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Total

2011

2012

2013

2014

2015

5.74 2.29

-9.65 12.93 10.35

7.90 0.08

5.47 -1.15 12.59

11.88 3.70

2.53 9.40 30.13

1.93 5.77

0.75 4.38 13.38

-0.27

. . . .

Trailing

Total

+/-

+/- Russ %Rank Growth of

Return% S&P 500 1000 Vl

Cat

$10,000

3 Mo

6 Mo

1 Yr

3 Yr Avg

5 Yr Avg

10 Yr Avg

15 Yr Avg

-0.32 -0.60

-0.43

56 9,968

-0.59 -1.82

0.02

65 9,941

4.54 -2.88

0.41

35 10,454

15.20 -2.11

-2.14

62 15,288

17.20 -0.14

0.70

9 22,113

. . . . .

Tax Analysis

Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat

3 Yr (estimated)

5 Yr (estimated)

10 Yr (estimated)

14.02

1.03

16.28

0.79

. . . .

Potential Capital Gain Exposure: 18% of assets

Rating and Risk

Time Load-Adj

Morningstar

Period Return % Rtn vs Cat

Risk vs Cat

Risk-Adj Rating

1 Yr

4.54

3 Yr

15.20

Avg

-Avg

5 Yr

17.20

+Avg

-Avg

10 Yr

. . . .

Incept

6.49

Other Measures

Standard Index

Best Fit Index

S&P 500 Mstar Large Cap TR

Alpha

-1.1

-1.0

Beta

0.96

0.97

R-Squared

Standard Deviation

8.66

Mean

15.20

Sharpe Ratio

1.68

Morningstar’s Take

by Michael Rawson 06-11-15

Vanguard High Dividend Yield’s low cost, admirable

performance, and respected parent earn it a

Morningstar Analyst Rating of Silver. It offers a yield

competitive with other dividend-focused funds without

concentrating on riskier stocks. It spreads its assets

over more than 400 U.S. stocks that have been

screened for their yields and then market-cap

weighted. The passive, market-cap-weighted approach

helps reduce turnover and eliminates the temptation to

reach for yield among small- and mid-cap stocks that

offer better yields but also greater risk.

Its diversification mitigates risk. Dividend-payers

are often considered defensive, and the Ken French

data library shows they have outperformed

non-dividend-payers since 1926. But they aren’t

risk-free. The highest-yielding stocks can be distressed,

headed for a dividend cut, or moribund. This fund’s

index tilts toward global conglomerates with big

competitive advantages, such as Exxon Mobil XOM,

Johnson & Johnson JNJ, and General Electric GE,

while minimizing higher-yielding but potentially riskier

names such as Freeport-McMoRan FCX and Universal

UVV.

The approach has paid off. From its 2006 inception

through April 2015, it has returned 6.9%, beating the

5.1% return of the average large-value fund and

slightly trailing the 7.1% return of the S&P 500, while

having a lower standard deviation. That ranks in the

top quintile of the large-value Morningstar Category.

Dividend-paying stocks have been popular as

income investors seek better yields than those offered

by fixed-income markets. This fund has brought in $10

billion in net flows during the past five years.

However, dividend-paying stocks could suffer if

interest rates begin to rise or if there is a sharp

pullback in the market. The fund lagged the S&P 500

as interest rates rose in the summer of 2013 and in the

bear market during the financial crisis. As an

index-tracker, this fund will maintain full market

exposure at all times; management does not have the

option to shift to cash or more-defensive stocks.

Patient investors should be rewarded.

Address:

Vanguard Whitehall Funds

Valley Forge, PA 19482

800-662-7447

Web Address:

www.vanguard.com

Inception:

11-16-06

Advisor:

Vanguard Group, Inc.

Subadvisor:

None

NTF Plans:

Vanguard NTF

Minimum Purchase:

$3000

Add:

IRA: $3000

Min Auto Inv Plan:

$3000

Add:

Sales Fees:

No-load

Management Fee:

0.16%

Actual Fees:

Mgt:0.16% Dist:

Expense Projections:

3Yr:$58

5Yr:$101 10Yr:$230

Income Distribution:

Quarterly

Data through June 30, 2015

Vanguard High Dividend Yield Index Inv

Ticker

Status Yield Total Assets

Mstar Category

VHDYX Open

3.0% $15,353 mil

Large Value

100% 99% 100% 100% 100% 100% 100% 100% 100%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 06-15

Historical Profile

Return

Risk

Rating

Above Avg

Below Avg

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

5.0

12.5

15.5

Portfolio Analysis

05-31-15

Share change since 04-15 Total Stocks:435 Sector

PE Tot Ret% % Assets

Exxon Mobil Corporation

Energy

12.5 -8.47 4.17

Microsoft Corp

Technology 18.4 -3.62 3.98

Wells Fargo & Co

Finan Svs 13.7 3.91 3.38

Johnson & Johnson

Hlth care 17.4 -5.41 3.21

General Electric Co

Industrl

18.8 -3.64 3.19

JPMorgan Chase & Co

Finan Svs 12.4 9.56 2.85

Procter & Gamble Co

Cnsmr Def 20.8 -12.67 2.49

Pfizer Inc

Hlth care 23.3 9.44 2.49

Verizon Communications I

Comm Svs 19.6 1.99 2.35

Chevron Corp

Energy

10.5 -12.10 2.27

AT&T Inc

Comm Svs 32.0 8.54 2.11

Merck & Co Inc

Hlth care 14.8 1.83 2.03

Coca-Cola Co

Cnsmr Def 24.8 -5.52 2.00

International Business M Technology 10.4 2.88 1.95

Intel Corp

Technology 12.9 -14.87 1.90

Cisco Systems Inc

Technology 15.9 0.16 1.76

PepsiCo Inc

Cnsmr Def 21.7 0.15 1.67

Philip Morris Internatio

Cnsmr Def 16.9 0.88 1.51

Wal-Mart Stores Inc

Cnsmr Def 14.5 -16.27 1.41

AbbVie Inc

Hlth care 59.5 4.20 1.34

Current Investment Style

Market Cap %

Giant

58.9

Large

26.8

Mid

10.6

Small

3.0

Micro

0.7

Avg $mil:

75,474

Value Blnd Growth

Large Mid Small

Value Measures

Rel Category

Price/Earnings

Price/Book

Price/Sales

Price/Cash Flow

Dividend Yield %

17.34

2.45

1.60

9.73

3.42

1.32

1.44

1.38

1.61

1.24

Growth Measures

% Rel Category

Long-Term Erngs

Book Value

Sales

Cash Flow

Historical Erngs

7.60

2.83

1.05

-2.13

2.37

0.87

0.55

0.70

NMF

0.68

Profitability

% Rel Category

Return on Equity

Return on Assets

Net Margin

21.48

6.61

12.97

1.32

1.10

1.09

Sector

Weightings

% of

Stocks

Rel

S&P 500 High

3 Year

Low

Cyclical 23.13

BasicMat 3.21

4 3

CnsmrCyc 5.67

8 5

FinanSvs 14.25

14 12

Real Est 0.00

0 0

Sensitive 42.86

CommSrvs 5.46

6 5

Energy 11.78

13 10

Industrl 12.01

15 12

Technlgy 13.61

19 9

Defensive34.01

CnsmrDef14.50

16 14

Hlthcare 11.86

12 11

Utilities 7.65

8 7

Composition - Net

(% of Stock)

Cash

0.1

Stocks 99.9

Bonds 0.0

Other

0.0

Foreign 0.9

timely.Pastperformance is no guarantee of future results.Access updated reportsat

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