(PUB) Investing 2015

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16 • Fund Family Shareholder Association
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
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.
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. Jeff gradu-
ated magna cum laude from Tufts University with a B.A. in
economics, holds the Chartered Financial Analyst designation
and is a member of the CFA Institute and the Boston Security
Analysts Society.
DAN’S DO-IT-NOW ACTION RECOMMENDATIONS
4 Bonds absolutely still have a role in balanced portfolios, but stick with corporate bonds and
shorter maturities, like those in Short-Term Investment Grade’s portfolio. (See page 1)
4 At least one Vanguard insider thinks the mutual fund giant could step up its security game.
Opting for two-step verification is something you can do today to better protect your account.
(See page 13)
4 The list of Vanguard funds paying quarterly distributions got a lot longer. Taxable investors will
want to double-check so they don’t buy a distribution. (See page 15)
Online Resources
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given its foreign stock allocation has
done admirably, gaining an annualized
8.8% over the 20-year span from Aug.
14, 1995, through Aug. 14, 2015. Total
Stock Market’s gain over the period was
8.9%, Strategic Equity’s was 11.0%, and
Capital Opportunity’s was 12.4%.
But the numbers for Capital Oppor-
tunity really understate its massive out-
performance under the PRIMECAP
Management team. From Feb. 1, 1998,
when PRIMECAP took over Capital
Opportunity, through Aug. 14, 2015,
the team generated a whopping 14.1%
annualized return compared to 6.7% for
Total Stock Market Index and 9.4% for
Strategic Equity. You and I have owned
> the fund for almost the entire period.
Now, that’s what I call a horizon job!
Pink Slips
August marked another couple of
anniversaries for Vanguard, though I
don’t know if they were celebrating.
It was five years ago, in August 2010,
that Vanguard gave the boot to AXA
Rosenberg Investment Management,
which at the time was managing money
at Explorer, Market Neutral and U.S.
Value. The quant firm apparently had
some computer troubles andwasn’t forth-
right about it. That earned them the axe.
That same month, AllianceBernstein’s
horrific growth stock team was finally
fired from U.S. Growth. They didn’t
have computers to blame, just bad stock-
picking. All of the aforementioned funds’
shareholders have benefited from those
moves. So, I guess “Happy Anniversary”
is the right thing to say after all. n 8/95 8/97 8/99 8/01 8/03 8/05 8/07 8/09 8/11 8/13 8/15
Capital Opportunity vs. TSM
Strategic Equity vs. TSM
Global Equity vs. TSM
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Horizon Jobs
The numbers for Capital
Opportunity really
understate its massive
outperformance under
PRIMECAP Management.