689 / 708
The Independent Adviser for Vanguard Investors
•
October 2016
•
15
FOR CUSTOMER SERVICE, PLEASE CALL
800-211-7641
500 Index
$0.8520 @ $199.17
Admiral T-M Balanced
$0.1460 @ $27.73
Admiral T-M Capital Appreciation $0.4830 @ $108.46
Admiral T-M SmallCap
$0.1230 @ $48.72
Balanced Index
$0.1520 @ $30.60
Consumer Discretionary ETF
$0.4740 @ $125.08
Consumer Discretionary Index
$0.2470 @ $64.00
Consumer Staples ETF
$0.8440 @ $136.47
Consumer Staples Index
$0.4180 @ $66.81
Convertible Securities
$0.0670 @ $12.52
Developed Markets ETF
$0.1750 @ $36.74
Developed Markets Index
$0.0420 @ $9.27
Dividend Appreciation ETF
$0.3930 @ $83.12
Dividend Appreciation Index
$0.1510 @ $33.46
Emerging Markets Stock ETF
$0.4500 @ $37.27
Emerging Markets Stock Index
$0.2800 @ $23.63
Energy ETF
$0.6120 @ $93.41
Energy Index
$0.3060 @ $46.36
Equity Income
$0.2210 @ $31.26
Europe ETF
$0.2650 @ $48.16
European Index
$0.1310 @ $26.32
Extended Market ETF
$0.3060 @ $89.73
Extended Market Index
$0.2120 @ $68.47
Financials ETF
$0.2910 @ $49.17
Financials Index
$0.1470 @ $24.68
Global ex-U.S. Real Estate ETF
$0.3790 @ $55.19
Global ex-U.S. Real Estate Index
$0.1410 @ $22.33
Growth ETF
$0.3760 @ $111.29
Growth Index
$0.1790 @ $57.15
Health Care ETF
$0.4980 @ $133.91
Health Care Index
$0.2490 @ $66.25
High Dividend Yield ETF
$0.4830 @ $71.61
High Dividend Yield Index
$0.1860 @ $28.58
Industrials ETF
$0.5690 @ $109.21
Industrials Index
$0.2920 @ $55.52
Information Technology ETF
$0.4030 @ $118.79
Information Technology Index
$0.2060 @ $60.64
Int’l Dividend Appreciation ETF
$0.1420 @ $56.70
Int’l Dividend Appreciation Index $0.0520 @ $22.73
Int’l High Dividend Yield ETF
$0.3740 @ $55.35
Int’l High Dividend Yield Index
$0.1440 @ $22.48
LargeCap ETF
$0.5500 @ $98.61
LargeCap Index
$0.2090 @ $39.50
Managed Payout
$0.0589 @ $17.75
Materials ETF
$0.5150 @ $105.52
Materials Index
$0.2620 @ $53.25
MegaCap ETF
$0.4220 @ $73.39
MegaCap Growth ETF
$0.3400 @ $87.09
MegaCap Value ETF
$0.4310 @ $62.26
MidCap ETF
$0.5080 @ $128.20
MidCap Growth ETF
$0.2200 @ $105.40
MidCap Growth Index
$0.0730 @ $41.04
MidCap Index
$0.1280 @ $34.65
MidCap Value ETF
$0.4930 @ $92.78
MidCap Value Index
$0.1820 @ $36.13
Pacific ETF
$0.2130 @ $58.70
Pacific Index
$0.0360 @ $11.34
REIT ETF
$0.5980 @ $85.38
REIT Index
$0.1890 @ $28.74
Russell 1000 ETF
$0.4980 @ $98.82
Russell 1000 Growth ETF
$0.4470 @ $106.55
Russell 1000 Value ETF
$0.5850 @ $91.62
Russell 2000 ETF
$0.4070 @ $99.33
Russell 2000 Growth ETF
$0.4120 @ $108.25
Russell 2000 Value ETF
$0.5030 @ $90.50
Russell 3000 ETF
$0.4980 @ $98.99
S&P 500 ETF
$0.8830 @ $196.90
S&P 500 Growth ETF
$0.4130 @ $108.74
S&P 500 Value ETF
$0.5670 @ $90.79
S&P MidCap 400 ETF
$0.4780 @ $103.69
S&P SmallCap 600 Growth ETF
$0.2830 @ $117.98
S&P SmallCap 600 Value ETF
$0.4230 @ $106.68
SmallCap ETF
$0.5720 @ $121.64
SmallCap Growth ETF
$0.3060 @ $131.83
SmallCap Growth Index
$0.0740 @ $36.63
SmallCap Index
$0.2560 @ $57.61
SmallCap Value ETF
$0.6550 @ $109.79
SmallCap Value Index
$0.1490 @ $26.05
Social Index
$0.0660 @ $13.71
STAR Cons. Gro.
$0.0890 @ $18.62
STAR Income
$0.0710 @ $15.19
Target Retirement Income
$0.0480 @ $12.96
Telecom Services ETF
$0.8110 @ $94.84
Telecomm. Svcs. Index
$0.4140 @ $47.46
Total International Stock ETF
$0.2740 @ $46.45
Total International Stock Index
$0.0850 @ $15.09
Total Stock Market ETF
$0.5390 @ $110.21
Total Stock Market Index
$0.2500 @ $53.84
Total World Stock ETF
$0.3110 @ $60.01
Total World Stock Index
$0.1230 @ $24.67
Utilities ETF
$0.9190 @ $111.04
Utilities Index
$0.4620 @ $54.41
Value ETF
$0.5580 @ $86.07
Value Index
$0.2090 @ $33.96
Wellesley Income
$0.1750 @ $25.90
Wellington
$0.2460 @ $38.37
World ex-U.S. ETF
$0.2550 @ $44.67
World ex-U.S. Index
$0.0980 @ $17.84
World ex-U.S. SmallCap ETF
$0.4690 @ $97.43
World ex-U.S. SmallCap Index
$0.1670 @ $37.51
Special Distributions
IT’S EARLY DAYS STILL,
and the bond
markets are roiled by questions about
just how long interest rates will remain
at low, low levels, and the bull could
turn at any moment.
Regardless,
Tax-Exempt Bond
Index
has proven to be a worthy com-
petitor to
Intermediate-Term Tax-
Exempt
since its inception just over one
year ago. With its slightly higher yield
and slightly longer duration (a measure
of interest-rate risk), the index fund has
managed to outperform over the last 12
months, up 5.7% versus 4.9%.
Of course, a reversal in the bond
market could bring the returns for the
siblings closer to one another, since
the index fund’s greater interest-rate
exposure will work against it as yields
rise. But, as I said, it’s early days, and
we have little evidence of how the index
fund will operate in real life when rates
are rising. Over its first year-plus, there
have only been two months, July and
September, when both funds lost money.
The difference in return each time was
less than four basis points, or 0.04%.
So how do you choose? Should
you favor the index fund over the
actively managed intermediate-term
muni fund? In my view, it’s really a
toss-up. Jeff and I have had a “Hold”
rating on the fund since inception as
we waited for the portfolio to be built
out and for Vanguard’s fixed-income
team to settle in with the fund. With
this issue, we’re raising that rating
to “Buy” to match the active fund,
but with one important caveat: Until
Vanguard removes the 0.25% front-
end load from the fund’s Investor and
Admiral shares, I’d only be a buyer
of the fund’s ETF shares, if you’re
inclined to go in this direction.
And that’s how most investors in the
new fund have played it. Through
MUNIS
Early Success for Tax-Exempt Index Fund
Total Return
8/15
9/15
10/15
11/15
12/15
1/16
2/16
3/16
4/16
5/16
7/16
8/16
Intermediate-Term Tax Exempt
Tax-Exempt Bond Index
Tax-Exempt Bond ETF
$100
$101
$102
$103
$104
$105
$106
$107
SEC Yield
9/15
10/15
11/15
12/15
1/16
2/16
3/16
4/16
5/16
7/16
8/16
Intermediate-Term Tax-Exempt
Tax-Exempt Bond Index
1.00%
1.20%
1.40%
1.60%
1.80%
2.00%
2.20%
>