The Independent Adviser for Vanguard Investors
•
April 2014
•
3
FOR CUSTOMER SERVICE, PLEASE CALL
800-211-7641
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
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RATIONAL
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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
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-
500 Index
$0.734 @ $172.04
Balanced Index
$0.128 @ $27.77
Convertible Securities
$0.068 @ $14.05
DevelopedMarkets ETF
$0.429 @ $40.51
DividendAppreciation ETF
$0.329 @ $74.65
DividendAppreciation Index
$0.122 @ $29.81
DividendGrowth
$0.051 @ $21.40
EmergingMarkets Stock ETF
$0.105 @ $39.49
EmergingMarkets Stock Index
$0.055 @ $24.59
Energy
$0.217 @ $67.18
Equity Income
$0.225 @ $29.98
Europe ETF
$0.878 @ $58.15
European Index
$0.460 @ $30.83
Extended-Duration Treasury ETF
$0.769 @ $99.91
ExtendedMarket ETF
$0.018 @ $84.79
ExtendedMarket Index
$0.013 @ $64.32
Financials ETF
$0.113 @ $45.55
Financials Index
$0.057 @ $22.82
Growth ETF
$0.275 @ $93.61
Growth Index
$0.125 @ $48.07
Health Care
$8.448 @ $194.61
HighDividend Yield ETF
$0.401 @ $62.69
HighDividend Yield Index
$0.154 @ $24.63
Inflation-Protected Securities
$0.008 @ $13.23
LargeCap ETF
$0.375 @ $85.69
LargeCap Index
$0.138 @ $34.46
Managed Payout
$0.056 @ $18.70
MegaCap ETF
$0.276 @ $63.49
MegaCapGrowth ETF
$0.198 @ $71.87
MegaCap Value ETF
$0.302 @ $55.74
MidCap ETF
$0.024 @ $112.91
MidCapGrowth ETF
$0.011 @ $92.46
MidCapGrowth Index
$0.002 @ $36.36
MidCap Index
$0.005 @ $30.76
MidCap Value ETF
$0.019 @ $81.93
MidCap Value Index
$0.004 @ $32.15
Pacific ETF
$0.115 @ $57.53
Pacific Index
$0.018 @ $10.90
REIT ETF
$0.453 @ $69.96
REIT Index
$0.142 @ $23.04
Russell 1000 ETF
$0.331 @ $85.90
Russell 1000Growth ETF
$0.300 @ $88.03
Russell 1000 Value ETF
$0.388 @ $83.51
Russell 3000 ETF
$0.322 @ $86.19
S&P 500 ETF
$0.779 @ $170.13
S&P 500Growth ETF
$0.249 @ $88.71
S&P 500 Value ETF
$0.407 @ $82.77
SmallCap ETF
$0.009 @ $112.80
SmallCapGrowth ETF
$0.017 @ $124.71
SmallCapGrowth Index
$0.003 @ $35.09
SmallCap Index
$0.001 @ $53.98
SmallCap Value ETF
$0.024 @ $100.17
SmallCapValue Index
$0.004 @ $23.97
STARCons. Gro.
$0.093 @ $18.23
STAR Income
$0.069 @ $14.50
Target Retirement Income
$0.048 @ $12.61
Tax-Managed International
$0.106 @ $9.97
T-MBalanced
$0.128 @ $25.27
T-MCapital Appreciation
$0.009 @ $95.49
T-MGrowth& Income
$0.386 @ $83.28
Total International StockETF
$0.367 @ $51.18
Total International Stock Index
$0.115 @ $16.26
Total StockMarket ETF
$0.423 @ $97.10
Total StockMarket Index
$0.192 @ $47.08
TotalWorldStockETF
$0.334 @ $58.88
TotalWorldStock Index
$0.131 @ $23.85
UtilitiesETF
$0.731 @ $89.33
Utilities Index
$0.366 @ $44.41
ValueETF
$0.430 @ $77.43
Value Index
$0.157 @ $30.03
Wellesley Income
$0.222 @ $25.20
Wellington
$0.243 @ $38.38
Worldex-U.S. ETF
$0.394 @ $49.23
Worldex-U.S. Index
$0.148 @ $19.22
MARCHSPECIALDISTRIBUTIONS
>
SEE
RATIONAL
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