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The Independent Adviser for Vanguard Investors
•
March 2016
•
9
FOR CUSTOMER SERVICE, PLEASE CALL
800-211-7641
PERFORMANCE REV I EW
VANGUARD VARIABLE ANNUITIES
Fund (fund #)
Advice
2/29
Price
Feb.
Return
YTD
Return
12-Mo.
Return
3-Year
Return
5-Year
Return Risk
Money Market Annuity (64)
— $1.90
0.0% 0.0% -0.1% -0.2% -0.2% —
Short-Term Inv.-Grade Annuity (144)
Buy
$18.62
0.1% 0.6% 0.8% 1.1% 1.8% 0.38
Total Bond Market Annuity (67)
Hold
$37.58
0.6% 2.0% 0.9% 1.7% 3.1% 0.99
High-Yield Bond Annuity (146)
Buy
$28.70
0.5% -0.6% -4.8% 1.6% 4.5% 1.58
Conservative Allocation Annuity (801)
Hold
$25.44
0.1% -1.3% -3.5% 3.9% — 0.41
Moderate Allocation Annuity (803)
Hold
$26.97
-0.1% -3.0% -5.9% 4.7% — 0.59
Balanced Annuity (69)
Buy
$79.85
-0.3% -3.1% -5.0% 6.7% 7.1% 0.65
Capital Growth Annuity (603)
Buy
$36.88
-1.1% -7.4% -8.2% 12.5% 10.8% 1.00
Diversified Value Annuity (145)
Buy
$26.65
-0.7% -5.0% -9.1% 7.3% 8.2% 0.97
Equity Income Annuity (8)
Buy
$68.47
0.0% -3.3% -4.1% 9.2% 10.5% 0.93
Equity Index Annuity (68)
Buy
$76.24
-0.2% -5.2% -6.6% 10.3% 9.7% 1.00
Growth Annuity (10)
Hold
$39.23
-1.4% -7.7% -5.8% 12.8% 10.9% 1.12
MidCap Index Annuity (143)
Buy
$43.31
1.2% -6.4% -11.4% 9.1% 8.3% 1.04
REIT Index Annuity (147)
Hold
$52.41
-0.5% -3.8% -4.7% 7.3% 8.7% 1.30
Small Company Growth Annuity (160)
Hold
$56.79
0.5% -10.0% -16.2% 7.2% 7.5% 1.41
Total Stock Market Annuity (604)
Hold
$27.50
-0.1% -5.8% -8.3% 9.5% 9.1% 1.01
International Annuity (86)
Buy
$33.21
-1.7% -9.5% -15.6% 0.1% 0.8% 1.23
Our ratings:
BUY: Best choice. Generally funds held in our
Model Portfolios or funds with similar objectives. HOLD:
Current prospects for the fund are not as good as those with
a Buy rating. However, investors who own shares in the fund
may wish to assess tax costs of trading into a Buy-rated fund.
SELL: The fund’s long-term prospects are not as compelling as
other funds’, or other factors may make the fund unattractive
compared to alternatives. “+” is a rating upgrade over the
previous month; “-” is a downgrade.
Investors should weigh all tax implications of fund switches
before making a sale or purchase. Some closed funds are
available for purchase by high-net-worth investors. All funds
charge a $20 annual account fee unless you have $10,000 in
the fund, $100,000 with Vanguard or accept all paperwork
through online means.
Minimum
refers to the dollar amount (e.g., $3K means
$3,000) needed to open a new taxable account.
Loads
are
denoted with an “f” for front-end and “r” for back-end.
Holding periods are noted for loads imposed on sales of
shares held less than two months (<2 mo.) or one year (<1).
3-year
and
5-year returns
are compound, annualized
returns.
Average maturity
is in years for bond funds and
days for money market funds.
12-month yields
are based
on trailing 12-month dividend/income distributions.
SEC
yields
are reported 30-day yields.
Taxable equivalent
yields
are based on SEC yields. For state funds, taxable
equivalent yields incorporate state taxes.
Risk
is fund vola-
tility measured over the previous 24 months. Equity fund risk
is measured against the S&P 500 index. Bond fund risk is
measured against the Barclays Aggregate Bond index.
Annuity ratings
May differ from taxable funds since choices
in the annuity area are more limited.
* Tax equivalent yields incorporate the 3.8% health care sur-
tax into the 33%, 35% and 39.6% tax rates.
** Fund sold with a 0.75% front-end load
*** Fund sold with a 0.25% front-end load
VANGUARD INCOME FUNDS
Fund (fund #)
Ticker Advice
Avg.
Mat.
2/29
Price
Feb.
Return
YTD
Return
12-Mo.
Return
3-Year
Return
5-Year
Return
12-Mo.
Yield
SEC
Yield
—— Tax Equivalent Yield ——
Risk
25% 28% 36.8%
*
38.8%
*
43.4%
*
TAXABLE INCOME
Ultra-Short-Term Bond (1492)
VUBFX
Buy 1.1 $9.99
0.1% 0.3% 0.5% — — 0.6% 0.87% — — — — — —
Short-Term Treasury (32)
VFISX
Sell
2.3 $10.74
0.2% 1.0% 1.2% 0.7% 1.0% 0.7% 0.62% — — — — — 0.36
Short-Term Federal (49)
VSGBX
Sell
2.8 $10.80
0.2% 1.0% 1.4% 0.8% 1.3% 0.9% 0.83% — — — — — 0.35
Short-Term Inflation Index (1967)
VTIPX
Hold 2.7 $24.32
0.2% 0.7% -0.1% -0.9% — 0.0% -0.12% — — — — — 0.60
Short-Term Investment-Grade (39)
VFSTX
Buy 3.4 $10.60
0.2% 0.7% 1.1% 1.4% 2.0% 2.0% 1.98% — — — — — 0.38
Short-Term Bond Index (132)
VBISX
Hold 2.8 $10.52
0.2% 1.1% 1.4% 1.0% 1.6% 1.3% 1.18% — — — — — 0.47
Inflation-Protected Sec. (119)
VIPSX
Hold 8.5 $13.18
1.1% 2.6% -0.9% -1.4% 2.7% 0.7% 0.17% — — — — — 1.48
Intermed. Treasury (35)
VFITX
Sell
5.7 $11.59
0.8% 3.2% 3.6% 1.9% 3.6% 1.6% 1.14% — — — — — 1.23
Intermed. Investment-Grade (71)
VFICX
Buy 6.4 $9.76
0.6% 1.7% 1.5% 2.5% 4.6% 3.0% 2.74% — — — — — 1.02
Intermed.-Term Bond Index (314)
VBIIX
Hold 7.2 $11.54
1.0% 2.9% 2.4% 2.4% 4.8% 2.6% 2.31% — — — — — 1.37
Total Bond Market (84)
VBMFX Hold 7.9 $10.82
0.7% 2.1% 1.2% 2.0% 3.4% 2.4% 2.17% — — — — — 1.00
GNMA (36)
VFIIX
Hold 5.7 $10.78
0.3% 1.5% 2.4% 2.4% 3.3% 2.3% 2.70% — — — — — 0.68
Long-Term Treasury (83)
VUSTX
Sell
24.9 $13.14
2.9% 8.2% 3.7% 5.8% 9.5% 2.6% 2.26% — — — — — 3.89
Long-Term Investment-Grade (28)
VWESX Hold 23.3 $10.11
1.5% 2.9% -2.1% 3.9% 7.8% 4.4% 4.07% — — — — — 2.66
Long-Term Bond Index (522)
VBLTX
Sell
24.1 $13.68
2.0% 4.3% -2.1% 3.6% 7.8% 4.0% 3.81% — — — — — 2.94
High-Yield Corporate (29)
VWEHX Buy 6.3 $5.46
0.5% -0.5% -4.4% 2.0% 4.9% 5.9% 6.56% — — — — — 1.61
Emerging Mkts. Gov’t Bond Idx. (1120)** VGOVX
Buy 9.9 $9.35
1.7% 1.6% 1.3% — — 4.6% 4.92% — — — — — 1.80
Total International Bond Index (1231)
VTIBX
Hold 9.0 $10.81
1.0% 2.7% 2.2% — — 1.5% 0.74% — — — — — 0.98
MONEY MARKET
Treasury MM (11)
VUSXX
— 58 $1.00
0.0% 0.0% 0.1% 0.0% 0.0% 0.0% 0.25% — — — — — —
Federal MM (33)
VMFXX
— 51 $1.00
0.0% 0.0% 0.1% 0.0% 0.0% 0.1% 0.30% — — — — — —
Prime MM (30)
VMMXX — 56 $1.00
0.0% 0.1% 0.1% 0.0% 0.0% 0.1% 0.40% — — — — — —
Tax-Exempt Money Market (45)
VMSXX
— 34 $1.00
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.01% 0.0% 0.0% 0.0% 0.0% 0.0% —
CA Tax-Exempt MM (62)
VCTXX
— 26 $1.00
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.01% 0.0% 0.0% 0.0% 0.0% 0.0% —
NJ Tax-Exempt MM (95)
VNJXX
45 $1.00
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.01% 0.0% 0.0% 0.0% 0.0% 0.0% —
NY Tax-Exempt MM (163)
VYFXX
— 23 $1.00
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.01% 0.0% 0.0% 0.0% 0.0% 0.0% —
OH Tax-Exempt MM (96)
VOHXX
— 32 $1.00
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.01% 0.0% 0.0% 0.0% 0.0% 0.0% —
PA Tax-Exempt MM (63)
VPTXX
— 20 $1.00
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.01% 0.0% 0.0% 0.0% 0.0% 0.0% —
TAX-FREE INCOME
Short-Term Tax-Exempt (41)
VWSTX Buy 1.5 $15.85
0.2% 0.4% 0.7% 0.6% 0.9% 0.7% 0.44% 0.6% 0.6% 0.7% 0.7% 0.8% 0.12
Limited-Term Tax-Exempt (31)
VMLTX
Buy 3.1 $11.09
0.2% 0.9% 1.8% 1.3% 1.9% 1.5% 0.73% 1.0% 1.0% 1.2% 1.2% 1.3% 0.38
Intermed.-Term Tax-Exempt (42)
VWITX
Buy 5.2 $14.38
0.0% 1.3% 3.6% 3.0% 4.8% 2.9% 1.34% 1.8% 1.9% 2.1% 2.2% 2.4% 0.72
Tax-Exempt Bond Index (1491)***
VTEBX Hold 5.5 $10.25
0.0% 1.1% — — — — 1.41% 1.9% 2.0% 2.2% 2.3% 2.5% 0.79
Long-Term Tax-Exempt (43)
VWLTX Hold 6.2 $11.82 -0.1% 1.2% 4.5% 4.0% 6.2% 3.6% 1.95% 2.6% 2.7% 3.1% 3.2% 3.4% 0.90
High-Yield Tax-Exempt (44)
VWAHX Hold 6.7 $11.38
0.0% 1.1% 4.3% 4.0% 6.6% 3.7% 2.44% 3.3% 3.4% 3.9% 4.0% 4.3% 0.88
STATETAX-FREE
CA Intermed. Tax-Exempt (100)
VCAIX
Buy 5.2 $11.96
0.1% 1.4% 3.9% 3.5% 5.4% 2.7% 1.24% 1.8% 1.9% 2.2% 2.3% 2.4% 0.72
CA Long-T. Tax-Exempt (75)
VCITX
Sell
6.5 $12.29
0.0% 1.2% 4.8% 4.4% 6.8% 3.5% 1.79% 2.7% 2.8% 3.2% 3.3% 3.5% 0.90
MA Tax-Exempt (168)
VMATX Sell
6.2 $10.99 -0.0% 1.1% 4.4% 3.7% 5.4% 3.1% 1.75% 2.5% 2.6% 2.9% 3.0% 3.3% 0.93
NJ Long-T. Tax-Exempt (14)
VNJTX
Sell
6.2 $12.19
0.0% 1.3% 3.6% 3.4% 5.6% 3.5% 2.43% 3.6% 3.7% 4.2% 4.4% 4.7% 1.02
NY Long-T. Tax-Exempt (76)
VNYTX
Sell
6.0 $11.99
0.0% 1.2% 4.7% 4.0% 5.8% 3.3% 1.70% 2.5% 2.6% 3.0% 3.0% 3.3% 0.85
OH Long-T. Tax-Exempt (97)
VOHIX
Sell
6.1 $12.73 -0.1% 1.2% 4.7% 4.1% 6.0% 3.3% 1.97% 2.8% 2.9% 3.3% 3.4% 3.7% 0.91
PA Long-T. Tax-Exempt (77)
VPAIX
Sell
5.6 $11.76 -0.1% 1.0% 4.2% 3.9% 5.8% 3.6% 2.04% 2.8% 2.9% 3.3% 3.4% 3.7% 0.84