(PUB) Investing 2016

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16 • Fund Family Shareholder Association
Daniel P. Wiener is America’s leading expert on
the Vanguard family of funds. He is founder of
the Fund Family Shareholder Association and
chairman and chief executive officer of Adviser
Investments, LLC, a Newton, Massachusetts,
investment advisory firm (800-492-6868). As
editor of The Independent Adviser for Vanguard Investors, he is
a five-time recipient of the Newsletter Publishers Foundation’s
Editorial Excellence Award. He also edits the annual
Independent Guide to the Vanguard Funds. Mr. Wiener is often
quoted in the nation’s leading financial publications.
Jeffrey D. DeMaso, Editor/Director of
Research, works directly with Dan Wiener
researching and writing the multiple-award
winning Independent Adviser for Vanguard
Investors newsletter. He also leads the analyst
team for Adviser Investments, LLC. Jeff gradu-
ated magna cum laude from Tufts University with a B.A. in
economics, holds the Chartered Financial Analyst designation
and is a member of the CFA Institute and the Boston Security
Analysts Society.
DO-IT-NOW ACTION RECOMMENDATIONS
4 A large cap-growth fund should drive portfolio returns for years to come. The PRIMECAP
Management team is among the best in the business. (See page 1)
4 Health Care has hit a rough patch, but stick with the fund. Portfolio manager Jean Hynes
is concentrating on her highest conviction picks. (See page 12)
4 Tax-Exempt Bond Index has held its own in its first year. Buy the ETF shares if you are
interested. (See page 15)
Analyze This
When I started this newsletter in 1991, I had
to thumb through paper SEC filings and copy
fund data by hand. But now, thanks to advances
in technology and the efforts of our team at
InvestorPlace, Jeff and I are able to bring you
an unprecedented research tool for Vanguard
investors: The Independent Vanguard Fund
Analyzer.
The Fund Analyzer takes everything you know
from our monthly newsletter and annual guide-
book to a whole new level. Like our guidebook,
it contains comprehensive data on every
Vanguard fund we track. And like our newsletter,
it’s updated every month. (Some data is even
updated daily.)
But unlike either, it gives you direct access to a
suite of online, interactive charts, tables, and other
analytical tools created directly from our in-house
database—and it’s designed to work with any
computer or mobile device you own. It’s like being
right there in our office with us, as your own inde-
pendent fund analyst on our research team, with
our proprietary risk and return statistics like rolling
returns, relative returns, Maximum Cumulative
Loss (MCL), and many more at your fingertips.
And the best part is, you can get the Fund
Analyzer for only $199 a year. For details on
how you can try it risk-free for 60 days, visit
or call
800/211-7641 and mention code MT9207.
the end of August, fully 88% of
Tax-Exempt Bond Index’s $544 mil-
lion in assets are planted in the ETF
shares. I should note, by the way, that
Tax-Exempt Bond Index remains a tiny
fund compared to the $53.1 billion
Intermediate-Term Tax-Exempt.
As I said, there’s no compelling
reason to pick the index fund over the
active fund. And there’s no reason not
to. Should interest rates continue ris-
ing, the active fund may show a slight
advantage over time, but if the pace of
that rate increase is slow, the index fund
may be able to make up the difference
with its slightly higher yield, without
exhibiting significantly larger capital
losses. Again, it’s kind of a toss-up. n
>
basis points higher, at 0.66% versus
0.56% for the taxable fund. If you’re
a high-tax-bracket investor who’s been
looking at the taxable money funds
with envy, well, now’s your chance to
gloat. That 0.66% tax-exempt yield is
roughly equivalent to a taxable yield
of 1.2%. You can find all this data on
page 9 in the Performance Review.
By the way, because of the reforms
that have been foisted upon money mar-
kets, Vanguard is now calculating net
asset values to four decimal points, and
you can see that number at vanguard.
com. Prime Money Market’s NAV, for
example, wasn’t actually $1.00, but
ended the month at $1.0002, which is a
whole lot better than if it was $0.9998.
As long as the money fund’s NAV stays
incrementally above (or even incremen-
tally below) its official one-dollar share
price, I’ll be comfortable. If the number
expands too far from its base (and I
don’t think it will, given Vanguard’s
historic aversion to risk) then we’ve got
a problem.
Finally, for those of you still trying
to get some resolution on problems
with the consolidation of your fund and
brokerage accounts, or bounced checks
or misdirected distributions, I heard
that Kenneth Agostinelli’s extension
was changed after I told you that he
in particular was very good at resolv-
ing issues for Vanguard shareholders.
The Resolution Services department
number is (800) 896-7309, and Ken
can currently be found at ext. 19767.
No doubt Vanguard will play cat-and-
mouse with Ken’s extension again, and
if it goes dark, the 800 number should
still help. n
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