699 / 708
The Independent Adviser for Vanguard Investors
•
November 2016
•
9
FOR CUSTOMER SERVICE, PLEASE CALL
800-211-7641
PERFORMANCE REV I EW
VANGUARD VARIABLE ANNUITIES
Fund (fund #)
Advice
10/31
Price
Oct.
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
$19.13
-0.1% 3.3% 2.9% 1.9% 2.1% 0.46
Total Bond Market Annuity (67)
Hold
$38.59
-0.8% 4.7% 4.0% 3.1% 2.4% 1.00
High-Yield Bond Annuity (146)
Buy
$31.90
0.2% 10.5% 7.0% 4.3% 6.1% 1.68
Conservative Allocation Annuity (801)
Hold
$27.12
-1.4% 5.2% 4.0% 4.3% 5.8% 0.42
Moderate Allocation Annuity (803)
Hold
$29.28
-1.6% 5.4% 3.8% 4.6% 7.3% 0.61
Balanced Annuity (69)
Buy
$87.41
-1.2% 6.1% 4.7% 6.2% 9.4% 0.67
Capital Growth Annuity (603)
Buy
$41.69
-2.9% 4.7% 4.6% 10.1% 14.8% 1.06
Diversified Value Annuity (145)
Buy
$29.65
-1.0% 5.7% 2.9% 5.6% 11.5% 0.97
Equity Income Annuity (8)
Buy
$76.05
-1.7% 7.5% 6.3% 7.9% 12.9% 0.92
Equity Index Annuity (68)
Buy
$84.81
-1.9% 5.5% 4.1% 8.4% 13.1% 1.00
Growth Annuity (10)
Hold
$42.24
-2.8% -0.7% -0.4% 9.2% 13.6% 1.09
MidCap Index Annuity (143)
Buy
$48.64
-3.1% 5.2% 2.6% 7.1% 12.5% 1.04
REIT Index Annuity (147)
Hold
$57.24
-5.8% 5.0% 6.2% 9.7% 10.8% 1.35
Small Company Growth Annuity (160)
Hold
$66.12
-6.0% 4.8% 3.7% 4.2% 11.5% 1.35
Total Stock Market Annuity (604)
Hold
$30.79
-2.2% 5.5% 3.8% 7.6% 12.8% 1.01
International Annuity (86)
Buy
$38.74
-3.1% 5.5% 3.2% 0.5% 6.3% 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.
10/31
Price
Oct.
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% 1.2% 1.0% — — 0.9% 1.02% — — — — — —
Short-Term Treasury (32)
VFISX
Sell
2.4 $10.74 -0.1% 1.6% 1.1% 0.8% 0.7% 0.8% 0.68% — — — — — 0.38
Short-Term Federal (49)
VSGBX
Sell
3.1 $10.82 -0.1% 1.9% 1.6% 1.2% 1.0% 1.0% 0.99% — — — — — 0.36
Short-Term Inflation Index (1967)
VTIPX
Hold 2.7 $24.83
0.0% 2.9% 2.5% 0.3% — 0.0% -0.70% — — — — — 0.62
Short-Term Investment-Grade (39)
VFSTX
Buy 3.2 $10.76 -0.0% 3.6% 3.2% 2.1% 2.3% 1.9% 1.57% — — — — — 0.44
Short-Term Bond Index (132)
VBISX
Hold 2.9 $10.55 -0.3% 2.3% 1.8% 1.3% 1.3% 1.4% 1.14% — — — — — 0.49
Inflation-Protected Sec. (119)
VIPSX
Hold 8.8 $13.72 -0.5% 6.9% 5.7% 2.0% 1.3% 0.7% -0.20% — — — — — 1.35
Intermed. Treasury (35)
VFITX
Sell
5.6 $11.55 -0.7% 4.0% 3.2% 2.7% 2.1% 1.5% 1.20% — — — — — 1.21
Intermed. Investment-Grade (71)
VFICX
Buy 6.4 $10.02 -0.6% 6.4% 5.8% 4.4% 4.3% 2.8% 2.28% — — — — — 1.05
Intermed.-Term Bond Index (314)
VBIIX
Hold 7.3 $11.72 -0.9% 6.3% 5.3% 4.2% 3.7% 2.5% 2.04% — — — — — 1.34
Total Bond Market (84)
VBMFX Hold 8.3 $10.96 -0.8% 5.0% 4.3% 3.3% 2.7% 2.3% 1.88% — — — — — 1.00
Core Bond (1320)
VCORX
Buy 7.6 $10.17 -0.7% — — — — — 1.85% — — — — — —
GNMA (36)
VFIIX
Hold 5.5 $10.83 -0.2% 3.5% 3.6% 3.3% 2.5% 2.3% 1.97% — — — — — 0.49
Long-Term Treasury (83)
VUSTX
Sell
24.7 $13.15 -4.2% 10.2% 9.0% 9.0% 5.1% 2.5% 2.24% — — — — — 4.01
Long-Term Investment-Grade (28)
VWESX Hold 23.7 $10.73 -2.5% 12.4% 11.5% 8.8% 6.5% 4.0% 3.54% — — — — — 2.79
Long-Term Bond Index (522)
VBLTX
Sell
24.3 $14.42 -2.9% 12.6% 10.9% 8.3% 5.6% 3.7% 3.38% — — — — — 3.01
High-Yield Corporate (29)
VWEHX Buy 7.0 $5.86
0.3% 10.7% 7.2% 4.7% 6.5% 5.3% 4.99% — — — — — 1.72
Emerging Mkts. Gov’t Bond Idx. (1120)** VGOVX
Buy 10.0 $10.04 -1.0% 12.4% 10.7% 5.6% — 4.5% 4.09% — — — — — 1.84
Emerging Markets Bond (1431)
VEMBX
— 9.4 $10.91 -0.9% — — — — — 4.35% — — — — — —
Total International Bond Index (1231)
VTIBX
Hold 9.5 $11.02 -1.2% 5.5% 5.4% 4.8% — 1.4% 0.47% — — — — — 1.11
MONEY MARKET
Treasury MM (11)
VUSXX
— 57 $1.00
0.0% 0.2% 0.2% 0.1% 0.1% 0.2% 0.26% — — — — — —
Federal MM (33)
VMFXX
— 56 $1.00
0.0% 0.2% 0.3% 0.1% 0.1% 0.3% 0.30% — — — — — —
Prime MM (30)
VMMXX — 52 $1.00
0.1% 0.4% 0.4% 0.1% 0.1% 0.4% 0.61% — — — — — —
Tax-Exempt Money Market (45)
VMSXX
— 31 $1.00
0.1% 0.2% 0.2% 0.1% 0.1% 0.2% 0.56% 0.7% 0.8% 0.9% 0.9% 1.0% —
CA Tax-Exempt MM (62)
VCTXX
— 18 $1.00
0.1% 0.2% 0.2% 0.1% 0.1% 0.2% 0.51% 0.8% 0.8% 0.9% 0.9% 1.0% —
NJ Tax-Exempt MM (95)
VNJXX
— 47 $1.00
0.0% 0.2% 0.2% 0.1% 0.1% 0.2% 0.46% 0.7% 0.7% 0.8% 0.8% 0.9% —
NY Tax-Exempt MM (163)
VYFXX
— 41 $1.00
0.1% 0.2% 0.2% 0.1% 0.1% 0.2% 0.52% 0.8% 0.8% 0.9% 0.9% 1.0% —
OH Tax-Exempt MM (96)
VOHXX
— 24 $1.00
0.1% 0.2% 0.2% 0.1% 0.1% 0.2% 0.51% 0.7% 0.8% 0.9% 0.9% 1.0% —
PA Tax-Exempt MM (63)
VPTXX
— 24 $1.00
0.1% 0.2% 0.2% 0.1% 0.1% 0.2% 0.50% 0.7% 0.7% 0.8% 0.8% 0.9% —
TAX-FREE INCOME
Short-Term Tax-Exempt (41)
VWSTX Buy 1.4 $15.80
0.0% 0.7% 0.6% 0.6% 0.7% 0.8% 0.88% 1.2% 1.2% 1.4% 1.4% 1.6% 0.14
Limited-Term Tax-Exempt (31)
VMLTX
Buy 2.9 $11.02 -0.1% 1.2% 1.3% 1.4% 1.6% 1.5% 1.08% 1.4% 1.5% 1.7% 1.8% 1.9% 0.37
Intermed.-Term Tax-Exempt (42)
VWITX
Buy 5.4 $14.31 -0.8% 2.6% 3.6% 4.1% 3.9% 2.7% 1.50% 2.0% 2.1% 2.4% 2.5% 2.7% 0.73
Tax-Exempt Bond Index (1491)***
VTEBX
Buy 5.6 $10.33 -0.9% 2.9% 4.3% — — 1.5% 1.61% 2.1% 2.2% 2.5% 2.6% 2.8% 0.81
Long-Term Tax-Exempt (43)
VWLTX Hold 6.5 $11.83 -1.1% 3.6% 5.4% 6.0% 5.2% 3.5% 1.99% 2.7% 2.8% 3.1% 3.3% 3.5% 0.94
High-Yield Tax-Exempt (44)
VWAHX Hold 6.8 $11.47 -1.2% 4.4% 6.2% 6.5% 5.7% 3.6% 2.49% 3.3% 3.5% 3.9% 4.1% 4.4% 0.94
STATETAX-FREE
CA Intermed. Tax-Exempt (100)
VCAIX
Buy 5.6 $11.90 -0.9% 2.6% 3.7% 4.4% 4.4% 2.6% 1.42% 2.1% 2.2% 2.5% 2.6% 2.8% 0.75
CA Long-T. Tax-Exempt (75)
VCITX
Sell
6.9 $12.29 -1.2% 3.5% 5.3% 6.3% 5.6% 3.3% 1.85% 2.7% 2.9% 3.3% 3.4% 3.6% 1.00
MA Tax-Exempt (168)
VMATX Sell
6.7 $10.98 -1.2% 3.0% 4.6% 5.5% 4.5% 2.9% 1.81% 2.5% 2.7% 3.0% 3.1% 3.4% 0.97
NJ Long-T. Tax-Exempt (14)
VNJTX
Sell
6.4 $12.31 -1.0% 4.7% 6.8% 5.5% 4.9% 3.5% 2.31% 3.4% 3.5% 4.0% 4.1% 4.5% 1.04
NY Long-T. Tax-Exempt (76)
VNYTX
Sell
6.2 $11.99 -1.1% 3.3% 5.0% 5.9% 4.8% 3.2% 1.74% 2.5% 2.7% 3.0% 3.1% 3.4% 0.90
OH Long-T. Tax-Exempt (97)
VOHIX
Sell
6.0 $12.77 -1.1% 3.6% 5.4% 6.1% 5.1% 3.2% 1.96% 2.8% 2.9% 3.3% 3.4% 3.7% 0.96
PA Long-T. Tax-Exempt (77)
VPAIX
Sell
6.2 $11.76 -1.1% 3.4% 5.0% 5.9% 4.9% 3.5% 2.10% 2.9% 3.0% 3.4% 3.5% 3.8% 0.89