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The Independent Adviser for Vanguard Investors
•
September 2016
•
9
FOR CUSTOMER SERVICE, PLEASE CALL
800-211-7641
PERFORMANCE REV I EW
VANGUARD VARIABLE ANNUITIES
Fund (fund #)
Advice
8/31
Price
Aug.
Return
YTD
Return
12-Mo.
Return
3-Year
Return
5-Year
Return Risk
Money Market Annuity (64)
— $1.90
0.0% 0.1% 0.1% -0.1% -0.1% —
Short-Term Inv.-Grade Annuity (144)
Buy
$19.12
-0.0% 3.3% 3.4% 2.3% 2.1% 0.46
Total Bond Market Annuity (67)
Hold
$38.96
-0.2% 5.7% 5.8% 4.0% 2.8% 0.99
High-Yield Bond Annuity (146)
Buy
$31.68
1.8% 9.7% 6.7% 5.2% 6.7% 1.79
Conservative Allocation Annuity (801)
Hold
$27.46
0.1% 6.6% 7.5% 6.3% — 0.43
Moderate Allocation Annuity (803)
Hold
$29.68
0.2% 6.8% 8.1% 7.1% — 0.62
Balanced Annuity (69)
Buy
$88.60
0.2% 7.5% 10.3% 8.5% 10.3% 0.67
Capital Growth Annuity (603)
Buy
$42.21
1.2% 6.0% 12.6% 13.9% 15.8% 1.04
Diversified Value Annuity (145)
Buy
$30.37
0.9% 8.3% 10.4% 8.8% 12.7% 0.96
Equity Income Annuity (8)
Buy
$77.67
-0.3% 9.8% 16.0% 11.1% 14.2% 0.92
Equity Index Annuity (68)
Buy
$86.43
0.1% 7.5% 12.1% 11.8% 14.2% 1.00
Growth Annuity (10)
Hold
$43.14
-1.1% 1.4% 6.3% 13.0% 14.6% 1.09
MidCap Index Annuity (143)
Buy
$50.05
0.1% 8.2% 7.7% 11.0% 13.6% 1.06
REIT Index Annuity (147)
Hold
$61.90
-3.7% 13.6% 25.1% 15.4% 13.0% 1.45
Small Company Growth Annuity (160)
Hold
$69.18
1.7% 9.7% 7.7% 9.1% 13.4% 1.35
Total Stock Market Annuity (604)
Hold
$31.44
0.2% 7.7% 10.9% 11.2% 13.9% 1.02
International Annuity (86)
Buy
$38.87
2.0% 5.9% 8.5% 4.5% 5.7% 1.32
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.
8/31
Price
Aug.
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 1.3 $10.01
0.1% 1.1% 1.1% — — 0.9% 0.90% — — — — — —
Short-Term Treasury (32)
VFISX
Sell
2.1 $10.74 -0.3% 1.5% 1.3% 1.0% 0.7% 0.9% 0.56% — — — — — 0.38
Short-Term Federal (49)
VSGBX
Sell
2.8 $10.82 -0.2% 1.7% 1.7% 1.4% 1.0% 1.0% 0.87% — — — — — 0.36
Short-Term Inflation Index (1967)
VTIPX
Hold 2.8 $24.65 -0.3% 2.1% 1.7% 0.3% — 0.0% -0.43% — — — — — 0.63
Short-Term Investment-Grade (39)
VFSTX
Buy 3.3 $10.78 -0.0% 3.5% 3.6% 2.5% 2.4% 2.0% 1.55% — — — — — 0.45
Short-Term Bond Index (132)
VBISX
Hold 2.8 $10.58 -0.3% 2.4% 2.2% 1.7% 1.3% 1.3% 1.01% — — — — — 0.49
Inflation-Protected Sec. (119)
VIPSX
Hold 8.9 $13.69 -0.4% 6.6% 5.2% 2.6% 1.6% 0.7% -0.14% — — — — — 1.48
Intermed. Treasury (35)
VFITX
Sell
5.5 $11.63 -0.7% 4.5% 4.4% 3.5% 2.3% 1.6% 1.03% — — — — — 1.22
Intermed. Investment-Grade (71)
VFICX
Buy 6.5 $10.11 -0.1% 6.9% 7.7% 5.3% 4.6% 2.9% 2.22% — — — — — 1.07
Intermed.-Term Bond Index (314)
VBIIX
Hold 7.2 $11.85 -0.6% 7.0% 7.2% 5.3% 4.0% 2.5% 1.88% — — — — — 1.36
Total Bond Market (84)
VBMFX Hold 8.0 $11.10 -0.2% 6.0% 6.1% 4.2% 3.1% 2.3% 1.80% — — — — — 1.00
Core Bond (1320)
VCORX
Buy 7.8 $10.28 -0.0% — — — — — 1.79% — — — — — —
GNMA (36)
VFIIX
Hold 5.0 $10.85
0.1% 3.4% 4.0% 4.2% 2.5% 2.3% 2.02% — — — — — 0.53
Long-Term Treasury (83)
VUSTX
Sell
24.5 $13.97 -1.0% 16.6% 16.9% 11.9% 7.7% 2.4% 1.93% — — — — — 3.87
Long-Term Investment-Grade (28)
VWESX Hold 23.2 $11.19
0.1% 16.5% 18.2% 11.1% 8.7% 3.9% 3.31% — — — — — 2.78
Long-Term Bond Index (522)
VBLTX
Sell
24.3 $15.11 -0.1% 17.3% 17.5% 10.8% 7.8% 3.5% 3.14% — — — — — 2.96
High-Yield Corporate (29)
VWEHX Buy 7.0 $5.86
1.7% 9.7% 6.8% 5.6% 7.1% 5.3% 4.86% — — — — — 1.84
Emerging Mkts. Gov’t Bond Idx. (1120)** VGOVX
Buy 10.0 $10.20
1.6% 13.4% 13.3% 7.7% — 4.4% 3.91% — — — — — 1.89
Emerging Markets Bond (1431)
VEMBX
— 9.5 $11.01
2.1% — — — — — 4.29% — — — — — —
Total International Bond Index (1231)
VTIBX
Hold 9.5 $11.19
0.0% 6.9% 8.0% 5.9% — 1.4% 0.41% — — — — — 1.03
MONEY MARKET
Treasury MM (11)
VUSXX
— 51 $1.00
0.0% 0.2% 0.2% 0.1% 0.0% 0.2% 0.25% — — — — — —
Federal MM (33)
VMFXX
— 51 $1.00
0.0% 0.2% 0.2% 0.1% 0.1% 0.2% 0.29% — — — — — —
Prime MM (30)
VMMXX — 39 $1.00
0.0% 0.3% 0.3% 0.1% 0.1% 0.3% 0.50% — — — — — —
Tax-Exempt Money Market (45)
VMSXX
— 31 $1.00
0.0% 0.1% 0.1% 0.1% 0.0% 0.1% 0.46% 0.6% 0.6% 0.7% 0.8% 0.8% —
CA Tax-Exempt MM (62)
VCTXX
— 24 $1.00
0.0% 0.1% 0.1% 0.0% 0.0% 0.1% 0.42% 0.6% 0.7% 0.7% 0.8% 0.8% —
NJ Tax-Exempt MM (95)
VNJXX
— 51 $1.00
0.0% 0.1% 0.1% 0.0% 0.0% 0.1% 0.40% 0.6% 0.6% 0.7% 0.7% 0.8% —
NY Tax-Exempt MM (163)
VYFXX
— 34 $1.00
0.0% 0.1% 0.1% 0.0% 0.0% 0.1% 0.43% 0.6% 0.7% 0.7% 0.8% 0.8% —
OH Tax-Exempt MM (96)
VOHXX
— 45 $1.00
0.0% 0.1% 0.1% 0.1% 0.0% 0.1% 0.42% 0.6% 0.6% 0.7% 0.7% 0.8% —
PA Tax-Exempt MM (63)
VPTXX
— 21 $1.00
0.0% 0.1% 0.1% 0.0% 0.0% 0.1% 0.42% 0.6% 0.6% 0.7% 0.7% 0.8% —
TAX-FREE INCOME
Short-Term Tax-Exempt (41)
VWSTX Buy 1.4 $15.85
0.0% 0.9% 1.0% 0.8% 0.7% 0.8% 0.61% 0.8% 0.8% 1.0% 1.0% 1.1% 0.13
Limited-Term Tax-Exempt (31)
VMLTX
Buy 2.8 $11.09 -0.1% 1.6% 2.4% 2.0% 1.5% 1.5% 0.78% 1.0% 1.1% 1.2% 1.3% 1.4% 0.36
Intermed.-Term Tax-Exempt (42)
VWITX
Buy 5.3 $14.55
0.2% 3.9% 6.0% 5.5% 4.2% 2.7% 1.20% 1.6% 1.7% 1.9% 2.0% 2.1% 0.66
Tax-Exempt Bond Index (1491)***
VTEBX Hold 5.6 $10.50
0.2% 4.4% 6.9% — — 1.4% 1.28% 1.7% 1.8% 2.0% 2.1% 2.3% 0.72
Long-Term Tax-Exempt (43)
VWLTX Hold 6.4 $12.10
0.3% 5.4% 8.3% 7.8% 5.7% 3.5% 1.66% 2.2% 2.3% 2.6% 2.7% 2.9% 0.83
High-Yield Tax-Exempt (44)
VWAHX Hold 6.6 $11.73
0.4% 6.1% 9.2% 8.3% 6.3% 3.5% 2.12% 2.8% 2.9% 3.4% 3.5% 3.7% 0.82
STATETAX-FREE
CA Intermed. Tax-Exempt (100)
VCAIX
Buy 5.5 $12.11
0.2% 4.0% 6.2% 6.0% 4.8% 2.6% 1.11% 1.6% 1.7% 2.0% 2.0% 2.2% 0.67
CA Long-T. Tax-Exempt (75)
VCITX
Sell
6.8 $12.60
0.3% 5.5% 8.6% 8.4% 6.3% 3.3% 1.51% 2.2% 2.3% 2.7% 2.8% 3.0% 0.87
MA Tax-Exempt (168)
VMATX Sell
6.4 $11.23
0.2% 4.8% 7.5% 7.4% 5.0% 2.9% 1.47% 2.1% 2.2% 2.5% 2.5% 2.7% 0.86
NJ Long-T. Tax-Exempt (14)
VNJTX
Sell
6.3 $12.56
0.5% 6.2% 9.9% 7.3% 5.3% 3.4% 2.04% 3.0% 3.1% 3.5% 3.7% 4.0% 0.96
NY Long-T. Tax-Exempt (76)
VNYTX
Sell
6.1 $12.26
0.3% 5.1% 7.9% 7.7% 5.3% 3.1% 1.41% 2.1% 2.1% 2.4% 2.5% 2.7% 0.79
OH Long-T. Tax-Exempt (97)
VOHIX
Sell
6.2 $13.06
0.3% 5.4% 8.2% 8.1% 5.6% 3.2% 1.66% 2.4% 2.5% 2.8% 2.9% 3.1% 0.86
PA Long-T. Tax-Exempt (77)
VPAIX
Sell
6.0 $12.02
0.3% 5.0% 7.7% 7.7% 5.3% 3.4% 1.75% 2.4% 2.5% 2.9% 3.0% 3.2% 0.78