(PUB) Investing 2016

297 / 708

7 Morningstar FundInvestor July 2016
Data through June 30, 2016 FINRA members: For internal or institutional use only.
Vanguard Long-Term Investment-Grade Inv Ticker
VWESX
Yield
4.0%
Total Assets
$15,271 mil
Mstar Category
Corporate Bond
Benchmark 1: Barclays US Corp IG TR USD
Benchmark 2: Barclays US Agg Bond TR USD
Morningstar Analyst Rating 06-24-16
„
Morningstar Pillars
Process ∞ Positive
Performance ∞ Positive
People ∞ Positive
Parent ∞ Positive
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 „ ´ ‰ Á
Pillar Spectrum
∞ Positive § Negative ¶ Neutral
10.0
12.5
15.0
17.5
20.0
Historical Profile
Return
Risk
Rating
High
High
QQQQQ
Highest
Investment Style
Equity
Growth of $10,000
Investment Values of
Fund
Investment Values of
Benchmark 1
) ( & ) * & * ) & ( & Performance Quartile
(within Category)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 06-16 History
9.25 9.06 8.72 8.92 9.34 10.29 10.85 9.65 10.75 9.90 10.95 NAV
2.86 3.75 2.29 8.75 10.71 17.18 11.66 -5.87 18.17 -2.21 13.24 Total Return %
-1.44 -0.81 7.23 -9.93 1.72 9.03 1.84 -4.33 10.70 -1.53 5.55 +/- Bmark 1
-1.48 -3.21 -2.95 2.82 4.17 9.34 7.44 -3.84 12.20 -2.76 7.92 +/- Bmark 2
5.61 5.81 5.84 6.19 6.02 5.74 4.99 4.56 4.95 4.26 2.24 Income Return %
-2.76 -2.06 -3.54 2.56 4.69 11.44 6.67 -10.43 13.21 -6.47 11.00 Capital Return %
96 53 6 97 46 1 39 97 1 75 2 Total Rtn % Rank Cat
0.52 0.52 0.51 0.52 0.52 0.52 0.50 0.48 0.47 0.45 0.22 Income $
0.00 0.00 0.00 0.00 0.00 0.08 0.12 0.09 0.15 0.18 0.03 Capital Gains $
0.25 0.25 0.22 0.23 0.26 0.24 0.22 0.22 0.22 0.22 0.21 Expense Ratio %
5.35 5.73 5.78 6.09 6.01 5.53 5.25 4.57 4.64 4.30 4.18 Income Ratio %
9 15 15 24 21 19 29 21 26 21 35 Turnover Rate %
4,187 4,273 3,658 4,035 3,836 4,121 4,472 3,962 4,482 3,984 4,235 Net Assets $mil
Performance 06-30-16
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
2012 0.44 5.57 4.66 0.62 11.66
2013 -0.61 -6.17 -0.30 1.25 -5.87
2014 6.34 4.62 0.82 5.35 18.17
2015 3.07 -7.63 2.63 0.09 -2.21
2016 6.77 6.05 — — —
Trailing Total
Return%
+/- Bmark
1
+/- Bmark
2
%Rank
Cat
Growth of
$10,000
3 Mo 6.05 2.48 3.84 3 10,605
6 Mo 13.24 5.56 7.92 2 11,324
1 Yr 16.31 8.37 10.31 1 11,631
3 Yr Avg 9.72 4.30 5.66 1 13,208
5 Yr Avg 9.31 3.88 5.55 1 15,607
10 Yr Avg 8.40 2.16 3.27 9 22,400
15 Yr Avg 7.80 1.77 3.32 9 30,842
Tax Analysis Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated) 7.26 1 2.24 96
5 Yr (estimated) 6.99 1 2.12 85
10 Yr (estimated) 6.16 8 2.07 81
Potential Capital Gain Exposure: 15% of assets
Rating and Risk
Time
Period
Load-Adj
Return %
Morningstar
Rtn vs Cat
Morningstar
Risk vs Cat
Morningstar
Risk-Adj Rating
1 Yr 16.31
3 Yr 9.72 High High QQQQQ
5 Yr 9.31 High High QQQQQ
10 Yr 8.40 High High QQQQ
Incept 8.62
Other Measures Standard Index Best Fit Index
Alpha -0.4 1.0
Beta 2.50 0.93
R-Squared 82 96
Standard Deviation 7.30
Mean 9.72
Sharpe Ratio 1.30
Portfolio Analysis 03-31-16
Total Stocks: 0
Share change since 12-31-15 Sector YTD Ret % % Assets
Current Investment Style
Large Mid Small
Value Blend Growth Market Cap %
Giant —
Large —
Mid —
Small —
Micro —
Avg $mil:
—
Value Measures Rel Category
Price/Earnings — —
Price/Book — —
Price/Sales — —
Price/Cash Flow — —
Dividend Yield % — —
Growth Measures % Rel Category
Long-Term Erngs — —
Book Value — —
Sales — —
Cash Flow — —
Historical Erngs — —
Profitability %
Return on Equity —
Return on Assets —
Net Margin —
Sector
Weightings
% of
Stocks
Rel
Bmark 1
h Cyclical 0.00 —
r BasicMat 0.00 —
t CnsmrCyc 0.00 —
y FinanSvcs 0.00 —
u Real Est 0.00 —
j Sensitive 0.00 —
i CommSrvs 0.00 —
o Energy 0.00 —
p Industrl 0.00 —
a Technlgy 0.00 —
k Defensive 0.00 —
s CnsmrDef 0.00 —
d Hlthcare 0.00 —
f Utilities 0.00 —
Composition - Net
Cash 4.7
Stocks 0.0
Bonds 95.3
Other 0.0
Foreign —
(% of Stock)
Morningstar's Take by Elizabeth Foos 06-24-16
On June 1, 2016, the lead manager of Vanguard Long-
Term Investment-Grade, L.T. Hill, retired from Wellington
Management Company, this fund's longtime subadvisor.
Comanager Scott St. John, who has worked closely with
Hill for a decade and was named to this fund in May 2014,
assumed responsibility for the Wellington-run portion of
the fund (90% of assets). St. John joined the firm in 2003
with prior experience as a fixed-income analyst. Because
this duo worked together for some time, we don’t expect
the change to cause significant disruption to the team or
its process. The fund's solid long-term record, strong
team, and low expenses earn it a Morningstar Analyst
Rating of Silver.
This fund has been successful at what it's designed
to do. It was added to the new corporate-bond
Morningstar Category in November 2013, but its defining
featuresareunchanged.Among itsnewpeersand former
cohorts in the long-term bond category, this portfolio still
stands out with a duration of 13.1 years (April 2016), well
above the average for both categories. It places itself
there mainly by staying within a year of its Barclays U.S.
Long Credit A or Better Index's duration. That trait and the
emphasis on higher-quality debt makes it sensitive to
interest-rate shifts. When yields ticked sharply upward in
2013's second quarter, its 5.9% loss was among the
worst in the category. When Treasury yields dipped in
2014, the fund gained 18.2% through year-end, which
beat all of its rivals. Over time, the fund's significant
interest-rate sensitivity has helped it in a market of
generally falling yields.
The team also stays close to home with regard to the
fund's sector weightings, which won't typically tilt more
than 10% from its bogy's. As spreads have tightened
since 2012, the fund’s managers increased its credit
quality. As of mid-2016, it had roughly 80% of assets in
bonds ratedAorAA,while itsaveragepeersockednearly
half its assets in BBB rated debt and invests in below-
investment-grade fare, which this fund avoids. The team
notes that this fund is attractive to institutional investors
looking to match long-dated liabilities.
Address: Vanguard Fixed Income Securities Funds Minimum Purchase: $3000 Add: $1 IRA: —
Valley Forge PA 19482 Min Auto Inv Plan: — Add: —
800-662-7447 Sales Fees: No-load
Web Address: Management Fee: 0.19%
Inception: 07-09-73 Actual Fees: Mgt:0.19% Dist:—
Advisor: Wellington Management Company LLP Expense Projections: 3Yr:$68 5Yr:$118 10Yr:$268
Subadvisor: None Income Distribution: Monthly
©2016Morningstar, Inc.All rights reserved. The information herein is not represented orwarranted to be accurate, complete or timely. Past
performance is no guarantee of future results.Access updated reports at . To order reprints, email ß® Mutual Funds A