(PUB) Morningstar FundInvestor

December 2013

Morningstar FundInvestor

23

Data through November 30, 2013 Vanguard Managed Payout Gr & Dis Inv

Ticker

Status Yield Total Assets

Mstar Category Retirement Income

VPGDX Open

4.3% $577 mil

Morningstar Analyst Rating 11-15-13

Investment Style Equity Stock %

Historical Profile Return Risk Rating Above Avg High Above Avg

68% 64% 76% 65% 76% 76%

´

Manager Change Partial Manager Change

Morningstar Pillars Process Performance

12.0

Growth of $10,000

Neutral Neutral Positive Positive Positive

¶ ¶

10.0

Investment Values of Fund Investment Values of M* MdTgRk

8.0

People Parent Price

6.0

NAV Total Return % +/-M* MdTgRk +/-Mstar Mod Inc Income Return % Capital Return % Total Rtn % Rank Cat Performance Quartile (within Category) History

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 11-13

Morningstar Analyst Rating Morningstar evaluates mutual funds based on five key pillars, which its analysts believe lead to funds that are more likely to outperform over the long term on a risk-adjusted basis. Analyst Rating Spectrum Œ „ ´ˇ ¨

17.62 15.92 13.68 . . . . . . 16.61 17.26

19.38 14.66

11.02 13.67 23.51 . . . . . . . 1.34 1.74 . . . . . . . 3.65 8.00 . . . . . . . 4.89 6.31 . . . . . . . 8.78 17.20 . . . . . . . 4 13 . . . . . . . Income $ 0.77 0.79 0.78 0.76 0.84 0.69 0.10 -3.44 4.59 -3.90 1.47 8.47 4.48 -1.02 2.24 4.86 6.16 10.18 9 22 60

Pillar Spectrum Positive

0.67 . . . . . . 0.00 0.00 . . . . . . 0.00 0.00 0.00

§ Negative

¶ Neutral

0.00

Capital Gains $

Expense Ratio % 0.22 . . . . . . . . . . . Income Ratio % . 1.96 1.97 1.98

Performance 11-30-13 1st Qtr 2nd Qtr

2.81 . . . . . . .

3rd Qtr

4th Qtr

Total

32 50 73 . . . . . . 178 115 . . . . . . 33 44 373 293 256

Turnover Rate % Net Assets $mil

. 577

2009 2010 2011 2012 2013

-7.24 13.52 12.26 4.48 23.51 2.91 -6.79 10.86 6.90 13.67 4.69 0.71 -10.51 6.71 0.69 8.08 -2.37 4.38 0.80 11.02 5.82 -0.67 4.88 . .

Rating and Risk Time Load-Adj

Portfolio Analysis 09-30-13 Total Stocks:0 Vanguard Total Stock Mkt Idx Inv Vanguard Total Intl Stock Index Inv Vanguard Market Neutral Inv Share change since 06-30-13

Morningstar

Morningstar Risk vs Cat

Morningstar Risk-Adj Rating

P/E

YTD % Net

Period Return % Rtn vs Cat

Sectors

Ratio Return % Assets

1 Yr 3 Yr 5 Yr

16.01 10.36 13.26

Trailing

Total

+/- M* +/- Mstar

%Rank Growth of

29.93 39.72 13.63 22.10 8.50 10.16 -1.57 7.02 -0.83 5.21 2.04 5.06 7.86

. . . . . .

Return% MdTgRk Mod Inc

Cat

$10,000

High +Avg

High High

3 Mo 6 Mo 1 Yr

7.43 0.74 6.84 0.45 16.01 1.52 10.36 0.41 13.26 0.75

3.39 3.56 9.50 3.16 3.74

3 10,743 8 10,684 7 11,601 4 13,441

10 Yr Incept

. . . .

Qif Portfolio 02

. .

4.54

Vanguard Total Bond Market II Idx Inv Vanguard Interm-Term Invmt-Grade Inv

3 Yr Avg 5 Yr Avg 10 Yr Avg 15 Yr Avg

Other Measures

Standard Index Best Fit Index M* MdTgRk Mstr Lft Mod 2025

13 18,637 . . . . . . . . . . Tax Analysis Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat

Vanguard REIT Index Inv

Vanguard Total Intl Bd Idx Investor

2.89 0.00

. . . .

Alpha

-0.9 1.15

-0.4 0.95

CMT Market Liquidity Rate

Beta

Date of Maturity

Amount

Value % Net $000 Assets

R-Squared

98

98

Total Fixed-Income:0

$000

3 Yr (estimated) 5 Yr (estimated) 10 Yr (estimated)

8.87

7

1.35 1.38

85

Standard Deviation

9.71

11.69 91 . . . . 16

Mean

10.36

Sharpe Ratio

1.06

Potential Capital Gain Exposure: 12% of assets

Morningstar’s Take by Josh Charlson 11-15-13 Vanguard Managed Payout Growth & Distribution’s reduced payout level may pave the way to prolonged success. In early 2014, Vanguard’s two other managed-payout options will merge into this one, which will be renamed simply Vanguard Managed Payout; its distribution rate will be reduced to 4% from its current 5%. This distribution level (based on a hypothetical account value for the previous three calendar years), is a realistic accommodation to the changed expectations for capital markets since the fund’s 2008 debut, which include lower yields and reduced return expectations for stocks and bonds. Other aspects of the fund’s design remain unchanged. It maintains an aggressive-allocation posture relative to peers in order to fund the ongoing payment stream. Vanguard’s experienced asset-allocation team uses what it calls a "miniendowment" approach with these funds, incorporating significant allocations to REITs, commodities, and a market-neutral strategy. Those

exposures come primarily via sturdy index funds, along with a commodity swap. The recent net equity exposure of around 76% is more than double the retirement-income category’s average 30% allocation and higher than most managed-payout fund peers and even the average moderate-allocation fund. The fund’s total-return patterns reflect this construction. This fund’s 11.8% five-year return through Oct. 31, 2013, ranks in the top 15% of the retirement-income category and is on par with the average moderate-allocation fund. The fund has exhibited higher volatility than peers, however. In theory, the diversified sources of return the fund relies on will, over the long term, smooth out its risk/return profile. But investors shouldn’t imagine this fund is like an annuity; it can lose money in a given year, and its payments will vary based on market performance. Still, the familiar Vanguard cost advantage, and the sound indexing and asset-allocation expertise of management, all tilt in the fund’s favor.

Equity Style

Fixed-Income Style Duration: Moderate Quality: Medium Avg Eff Duration Avg Eff Maturity Avg Credit Quality Avg Wtd Coupon 1

Style: Blend Size: Large-Cap Value Measures Price/Earnings Price/Book Price/Sales Price/Cash Flow Dividend Yield % Growth Measures Long-Term Erngs Book Value Sales Cash Flow Historical Erngs

5.6 Yrs 7.2 Yrs

Rel Category

15.32 1.88 1.13 6.34 2.33 8.30 -15.52 -13.92 -7.82 -11.44

1.04 0.99 0.92 0.94 1.01 0.80 NMF NMF NMF NMF

A

3.64%

figure provided by fund as of 09-30-13 1

Sector Weightings

% of Stocks

Rel M* MdTgRk High

3 Year Low

% Rel Category

Cyclical 42.08 1.08 BasicMat 5.22 0.90 6 5 CnsmrCyc11.62 1.01 12 9 FinanSvs 15.90 0.88 16 12 Real Est 9.34 2.50 16 9 Sensitive 36.57 0.97 CommSrvs 3.61 0.94 4 3 Energy 8.09 0.91 9 8 Industrl 12.01 0.95 12 11 Technlgy 12.86 1.04 13 12 Defensive21.36 0.92 CnsmrDef 8.38 0.95 9 7 Hlthcare 9.85 0.96 10 8 Utilities 3.13 0.77 4 3

h r t y u j i o p a k s d f

Market Cap % Giant 36.1 Large 29.3 Mid 22.3

Small Micro

10.6

1.7

Avg $mil:

21,105

Address:

P O Box 2600 Valley Forge, PA 19482 800-662-7447 www.vanguard.com

Minimum Purchase: Min Auto Inv Plan:

$25000

Add: $100 IRA: $0

Composition - Net

$0

Add: .

Cash 0.8 Stocks 76.3 Bonds 14.5 Other 8.3 Foreign 29.6

Sales Fees:

No-load

Web Address: Inception: Advisor: Subadvisor: NTF Plans:

Management Fee:

.

05-02-08

Actual Fees:

Mgt:0.00% Dist: .

Vanguard Group, Inc.

Expense Projections: Income Distribution:

3Yr:$138 Monthly

5Yr:$241 10Yr:$542

None

(% of Stock)

Vanguard NTF

Mutual Funds ß ®

© 2013Morningstar, Inc.All rights reserved. The information herein isnot represented orwarranted to be accurate, correct, complete or timely. Pastperformance isnoguarantee of future results.Access updated reports at To order reprints, call 312-696-6100. mfb.morningstar.com.

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