To: Veterans and Principals<\/p>\n
From: John C. Bogle<\/p>\n
Date: June 11, 2015<\/p>\n
RE: Vanguard in the News<\/p>\n
(1) I\u2019m delighted to start this list of news stories with a splendid full-page essay in the Financial Times on May 27, 2015; Investment: Vanguard\u2019s Commanding Position<\/a>, by Stephen Foley. You\u2019ll be familiar with many of the events he describes but perhaps less so with the history of the nautical theme that is not only featured, but described at length. NOTE: The online version of the Financial Times article was accompanied by a wonderful video focused on our nautical heritage. It\u2019s short and worth watching. Click here to view the video.<\/a><\/p>\n (2) John Rekenthaler\u2019s Morningstar essay, Jack Bogle\u2019s Great Insight<\/a>, June 11, 2015. In our interview, John quickly picked up on one of Vanguard\u2019s founding pillars! Offering funds with relative predictability, designed to parallel the competitive peer groups, avoiding the performance saving that provide elation to investors and then disappointment (as cash pours out). The idea: to help investors avoid the behavioral problems so often engendered by moving from one fund to another.<\/p>\n John cites our Vanguard Total Stock Market Index Fund as the classic example of relative predictability (now known as high R2, measured by fund returns relative to its comparable index(es) or peers). Of course that\u2019s true. But he fails to mention the high R2s of most of our actively managed funds . . . Wellington 0.97, Wellesley 0.96, Morgan 0.98, Strategic Equity 0.98, Windsor II 0.97, Windsor 0.95, even PRIMECAP 0.93 and Health Care 0.92. Our major municipal bond funds came in at 0.98 and 0.97. This is no accident, merely the result of a multi-manager strategy and (to a lesser extent) the right portfolio standards we demand of many of our active managers.<\/p>\n (3) Why Bogle and Buffett tell investors to ignore market noise<\/a>, Market Watch, June 4, 2015, by Mitch Tuchman. You all know this consistent message; the photos are sort of clever.<\/p>\n