(PUB) Investing 2015

interest rates. This is called a barbell approach, and though you won’t avoid state taxes on all of your income since the national fund won’t give you full state-tax-free interest, you will have greater downside protection. A 50-50 mix may be a good start- ing place, but only you can know how much downside risk you are willing to withstand. n

nice balance between risk and return. If you already own the long-term funds (or think you’d like to because of the tax advantages in your state), but are uncomfortable with anything but small, incremental losses, one solution could be to blend your holdings with Limited- Term Tax-Exempt or even Short-Term Tax-Exempt to moderate how sensitive your overall portfolio is to changes in $0.140 @ $26.24 Admiral T-M Capital Appreciation $1.239 @ $99.20 Admiral T-M SmallCap $0.370 @ $43.95 Balanced Index $0.142 @ $28.84 Consumer Discretionary ETF $1.147 @ $115.40 Consumer Staples ETF $2.396 @ $120.23 Convertible Securities $0.039 @ $12.75 Developed Markets ETF $0.156 @ $35.69 Developed Markets Index $0.036 @ $8.77 Dividend Appreciation ETF $0.443 @ $72.46 Dividend Appreciation Index $0.170 @ $29.58 Emerging Markets Stock ETF $0.450 @ $32.69 Emerging Markets Stock Index $0.275 @ $20.86 Energy ETF $1.955 @ $83.01 Equity Income $0.217 @ $28.86 Europe ETF $0.225 @ $49.07 European Index $0.111 @ $26.07 Extended Market ETF $0.693 @ $80.37 Extended Market Index $0.460 @ $64.24 Financials ETF $0.287 @ $46.65 Global ex-U.S. Real Estate ETF $0.246 @ $50.81 Global ex-U.S. Real Estate Index $0.087 @ $20.11 Growth ETF $0.347 @ $102.91 Growth Index $0.159 @ $53.31 Health Care ETF $1.143 @ $118.77 High Dividend Yield ETF $0.528 @ $61.39 High Dividend Yield Index $0.205 @ $24.80 Industrials ETF $1.415 @ $93.28 Information Technology ETF $0.985 @ $98.34 LargeCap ETF $0.448 @ $88.70 LargeCap Index $0.171 @ $35.84 Materials ETF $1.568 @ $85.23 MegaCap ETF $0.371 @ $66.43 MegaCap Growth ETF $0.300 @ $79.79 MegaCap Value ETF $0.388 @ $55.73 MidCap ETF $1.130 @ $114.15 MidCap Growth ETF $0.438 @ $95.76 MidCap Growth Index $0.135 @ $39.43 MidCap Index $0.273 @ $32.52 MidCap Value ETF $1.193 @ $81.71 MidCap Value Index $0.436 @ $33.17 Pacific ETF $0.193 @ $54.07 Special Distributions 500 Index $0.911 @ $180.57 Admiral T-M Balanced

wouldn’t rush to sell if you already own this, but if I were looking for a muni fund today, I’d resist the yield temptation and keep my portfolio’s duration a bit shorter. High-YieldTax-Exempt Hold. This is not a “junk bond” fund— less than 15% of its portfolio is in below- investment grade bonds. In that light, the fund isn’t really comparable to High- Yield Corporate , where more than 90% of the portfolio is “junk.” This is still a high-yielding fund, though. It’s just more on par with Long-Term Investment- Grade. The difference between this fund and its tax-exempt siblings is that High- Yield Tax-Exempt holds about 70% of its portfolio in bonds rated A or bet- ter, while a fund like Long-Term Tax- Exempt, for instance, has more than 90% of its portfolio there. You’ll pick up more income with High-Yield Tax-Exempt, but don’t forget that its higher yield sig- nals higher risk. The high-yield fund’s worst 12-month stretch in the past decade was a decline of 10.5%, or roughly double Long-Term Tax-Exempt’s worst 12-month loss of 5.8%. If you really like that tax-free cash and can stomach the volatility, this is the fund for you. But please don’t overdo it. A duration of 6.3 years (comparable to Long-Term Tax-Exempt’s) and the allocation to lower-rated bonds give the fund a double dose of risk. StateTax-Exempts Sell/Buy. There’s only one state- specific tax-exempt fund I recommend for purchase at Vanguard, and that’s California Intermediate-Term . Similar to Intermediate-Term Tax-Exempt, this fund invests in a sweet spot of the bond market that has historically provided a

Pacific Index REIT ETF REIT Index

$0.032 @ $10.17 $0.752 @ $74.53 $0.241 @ $24.98 $0.441 @ $90.14 $0.355 @ $98.15 $0.525 @ $82.63 $0.630 @ $91.25 $0.473 @ $103.26 $1.037 @ $80.25 $0.392 @ $90.35 $0.953 @ $178.02 $0.374 @ $98.97 $0.498 @ $81.69 $0.914 @ $93.82 $0.704 @ $106.73 $0.847 @ $92.19 $0.959 @ $110.01 $0.698 @ $120.88 $0.162 @ $34.38 $0.406 @ $53.03 $1.143 @ $98.13 $0.251 @ $23.58 $0.135 @ $12.66 $0.090 @ $17.84 $0.073 @ $14.62 $0.048 @ $12.59 $2.341 @ $78.35 $0.224 @ $44.20 $0.070 @ $14.11 $0.508 @ $99.61 $0.233 @ $48.55 $0.279 @ $55.61 $0.106 @ $22.61 $0.875 @ $91.91 $0.525 @ $77.34 $0.193 @ $30.32 $0.188 @ $24.71 $0.243 @ $37.31 $0.228 @ $42.65 $0.084 @ $16.70 $0.454 @ $90.68 $0.162 @ $34.43

Russell 1000 ETF

Russell 1000 Growth ETF Russell 1000 Value ETF Russell 2000 Growth ETF Russell 2000 Value ETF Russell 2000 ETF

Russell 3000 ETF

S&P 500 ETF

S&P 500 Growth ETF S&P 500 Value ETF S&P MidCap 400 ETF

S&P SmallCap 600 Growth ETF S&P SmallCap 600 Value ETF

SmallCap ETF

SmallCap Growth ETF SmallCap Growth Index

SmallCap Index

SmallCap Value ETF SmallCap Value Index

Social Index

STAR Cons. Gro.

STAR Income

Target Retirement Income Telecom Services ETF Total International Stock ETF Total International Stock Index

Total Stock Market ETF Total Stock Market Index Total World Stock ETF Total World Stock Index

Utilities ETF Value ETF Value Index

Wellesley Income

Wellington

World ex-U.S. ETF World ex-U.S. Index

World ex-U.S. SmallCap ETF World ex-U.S. SmallCap Index

DIVIDENDS Vanguard Looks Overseas for Income

Index and International High Dividend Yield Index in both open- end and ETF formats. The funds are expected to launch on December 7. Expense ratios will start at a very low

level, with Investor shares charging 0.35% and 0.40%, respectively, andAdmiral and ETF shares charging 0.25% and 0.30%. International Dividend Appreciation Index will track a higher-quality variant

BOWING TO INVESTOR DEMANDS for greater income, and finding it in non-U.S. stocks, Vanguard filed plans with the SEC to launch two new funds, International Dividend Appreciation

14 • Fund Family Shareholder Association

www.adviseronline.com