HowtoPickaGoodActiveManHdOut - e*aT5 EEm to FE*Ec Y0 gives...

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e*aT5 Y0.) EEm to FE*Ec &ctiveEy antaged FrNstSs E-Eke ect $ndexer lu4y aim as editor of the Vanguard Fund Fanily Reoort is to provide ycu with icieas and information that n,lll heip you make ihe m0st of ycur Vanguard funds - ch edirion tackles a rrariety of issues, but the ilosoohy and goals underpinning them remain the me. I am, like rncst of you, a Vanguard investor ho thinks ihe marilei is very haid io beai and who gives a gooci idea of where L'm coming f rom. A fev,r ysars ago i appiiecl Boqie's screen tc the entii-e mutual fund universe and came up v'vith some interesting anC, for the most pan, successful rr:sulis. Festructuring UMBIX Sound Shore SSHFX, and T Bowe Price tVid-Cap Grov.rth FPl,,4GX, that cjrubbed their resnective category averagss since they appeared on the list in February 2001 (Okay thai screen alsc let throuqh the cilsrnal White Cak Select Growth W0GS)(, but no system is perfect ) ln this supplemsnt, i decided it would be instructive i0 iurn ihe founCer's crireria loose on his own firm's aciively managed funds to see how the offerings stood up. I looked for actively managed Vanguard funds run by manaoers_ the bottom fouilh of their neer o,'c!pl{which, frani<ly. dicjn't eliminate many Vanguard funds, for obvious reasons), and lower turnover and iax-c0si ratios than their category_pgg6 To help gaLrqe consistenly, I also looked for funds that had finished six of the last 1 0 vsars in the top half of their categories, with n0 rnoi-e than two appeai-ances in the bot.tom iourth of their peer gr0ups over the sane tinre period. ln his book, Bogle predicted fevu funds would survive his screens, That was true flve vears ago u",hen I acliisd it to all iuncis, and ir rrvas true when I used 'rhe Bogls formula on Vanguard's offerings. 0ut of more than 70 distinct actively managed Vanguard funcis, this sieve left us with a handful stock and boncj cffering;s Mcsi of tne winners shcuid come as no surDrise ic reguiar readers of this nevrsietter-mail,/ of them ai'e Morn- ingstar Analyst Picks. Here's a iccli at the f unds ihat marie tlre cut \F.iii* [svl'sd Tiir Fr:rrri? Let's begin with the surdrise quaiifier', Vanguard AssetAllocation is kind of an ocd duck and not one of the more popular optir:rrs amai':E !/anguarC investors. Rather than have ihe fund ofier sratic expc- sure tc siocks and bonds iike rncst of iis peers in ths m0dorate-ailocaiion categcry, managcr Tom Lceb of N4ellor Capitai adjusts his poitlon of eaih asset class over time He reiies on a cuanirtative ntoiel to cn edr|0n tacKles a valetY 01 rssues, 0ut tr ilosoohy and goals underpinning them remi me. I am, like rncst of you, a Varrguard inve ho thinks ihe marilei is very haid io beai an es index funds as the cor-e of his portfollo. I
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This note was uploaded on 09/08/2010 for the course BUS 172B at San Jose State.

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HowtoPickaGoodActiveManHdOut - e*aT5 EEm to FE*Ec Y0 gives...

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