I. CALL TO ORDER AGENDA RETIREE HEALTH CARE TRUST BOARD SPECIAL MEETING MONROE COUNTY BOARD OF COMMISSIONERS CHAMBERS ROOM FRIDAY, OCTOBER 28, 2016 11:30 A.M. 125 E. SECOND STREET MONROE, MI 48161 (734) 240-7003 Retiree Health Care Trust Board Special Meeting October 28, 2016 Page 1 II. III. IV. ROLL CALL PLEDGE OF ALLEGIANCE APPROVAL OF AGENDA V. PUBLIC COMMENT VI. NEW BUSINESS 1. Review of Smid Value section of investment portfolio and any action to change the manager to another active manager or passive investment instrument. VII. VIII. MEMBERS TIME ADJOURNMENT The County of Monroe will provide necessary auxiliary aids and services, such as signers for the learning impaired and audiotapes of printed materials being considered at the meeting to individuals with disabilities at the meeting upon one week s notice to the County of Monroe. Individuals with disabilities requiring auxiliary aids or services should contact the County of Monroe by writing or calling the following: Human Resources 125 East Second Street, Monroe, MI 48161 Voice (734) 240-7295 and TDD (734) 240-7300
Small Cap Investment Options, October 2016 Michael W. Holycross, CIMA Executive Director Institutional Consulting Director Michael H. Cho, CRPS Vice President Corporate Retirement Director Please read important disclosures at the end of the presentation.
Manager Performance October 2009 - September 2016 (Single Computation) 280 : Morgan Stanley 260 240 220 200 180 160 140 120 100 Q3 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q3 2016 Portfolio Performance vs. Annualized Return (%) Cumulative Return (%) Std Dev (%) Annualized Excess Return (%) Cumulative Excess Return (%) Info Ratio Significance Level (%) Explained Variance (%) Tracking Error (%) 15.15 168.44 17.33 2.66 40.51 0.51 88.99 91.09 5.23 12.54 128.67 17.28 0.05 0.75 0.17 66.69 99.97 0.31 14.60 159.55 16.20 2.11 31.62 0.86 97.10 98.27 2.46 13.58 143.83 16.56 1.09 15.91 0.45 86.21 98.12 2.44 2
Manager vs Benchmark: Return October 2009 - September 2016 (not annualized if less than 1 year) 25 : Morgan Stanley 20 Return 15 10 5 0 YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years Manager vs Benchmark: Return October 2009 - September 2016 (not annualized if less than 1 year) YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years 11.59% 19.47% 15.44% 13.10% 17.26% 20.30% 14.92% 15.15% 11.54% 15.53% 8.17% 6.73% 12.15% 15.86% 12.39% 12.54% 13.86% 18.17% 10.64% 8.99% 14.24% 17.83% 14.69% 14.60% 11.50% 14.97% 7.14% 7.92% 13.10% 16.70% 13.31% 13.58% 11.46% 15.47% 8.12% 6.71% 12.12% 15.82% 12.35% 12.49% 3
Calendar Year Return As of September 2016 50% : Morgan Stanley 40% 30% 20% 10% 0% -10% YTD 2015 2014 2013 2012 2011 2010 YTD 2015 2014 2013 2012 2011 2010 11.59% 8.64% 7.10% 42.52% 14.49% -6.02% 28.07% 11.54% -4.47% 5.03% 38.69% 16.69% -4.44% 26.93% 13.86% -2.07% 5.85% 41.32% 16.29% 0.79% 26.60% 11.50% -3.64% 7.50% 37.81% 18.24% -2.69% 27.89% 11.46% -4.41% 4.89% 38.82% 16.35% -4.18% 26.86% 4
Manager Style October 2009 - September 2016 (Single Computation) Large Asset Allocation October 2009 - September 2016 (Single Computation) 0.0% 0.1% Citigroup 3-month T-bill 3.6% 0.0% : Morgan Stanley Russell 1000 Value Russell 1000 Growth 1 0.0% Russell 1000 Value 0.0% 13.4% 17.7% 0-1 Zephyr Small Core Universe (Morningstar) Russell Generic Corners 11.3% 0.0% Russell 1000 Growth 6.3% 4.6% Value 49.1% 46.5% 65.1% 67.7% Value Growth Small Value -1 0 1 Growth 10.2% Growth 50.8% 22.4% 31.1% 0% 20% 40% 60% 80% 100% Manager Style October 2009 - September 2016 (20-Quarter Moving Windows, Computed Quarterly) Large Asset Allocation October 2009 - September 2016 (20-Quarter Moving Windows, Computed Quarterly) 0.0% 0.1% Citigroup 3-month T-bill 2.7% 0.0% 1 Russell 1000 Value Russell 1000 Growth 1.4% 0.0% Russell 1000 Value 0.0% 15.9% 0-1 Value Growth Russell Generic Corners 7.6% 0.1% Russell 1000 Growth 3.9% 5.1% Value 48.0% 42.8% 65.6% 60.9% Small Value -1 0 1 Growth 25.4% Growth 51.8% 32.6% 36.2% 0% 20% 40% 60% 80% 100% 5
Risk / Return October 2009 - September 2016 (Single Computation) 18% : Morgan Stanley 16% 14% 12% Return 10% 8% 6% 4% Market Benchmark: Zephyr Small Core Universe (Morningstar) Cash Equivalent: Citigroup 3-month T-bill 2% 0% 0% 5% 10% 15% 20% Standard Deviation Return (%) Std Dev (%) Downside Risk (%) Beta vs. Market Alpha vs. Market (%) R-Squared vs. Market (%) R-Squared vs. Style (%) Sharpe Ratio Tracking Error vs. Market (%) Observs. 15.15 17.33 13.45 0.9564 3.04 91.09 94.00 0.8693 5.2282 28 12.54 17.28 13.47 0.9993 0.06 99.97 99.97 0.7207 0.3088 28 14.60 16.20 12.51 0.9289 2.70 98.27 98.88 0.8956 2.4619 28 13.58 16.56 12.99 0.9484 1.57 98.12 99.01 0.8150 2.4377 28 12.49 17.29 13.49 1.0000 0.00 100.00 100.00 0.7173 0.0000 28 6
Upside / Downside October 2009 - September 2016 (Single Computation) 120 : Morgan Stanley 115 110 105 Upside% 100 95 90 85 80 80 85 90 95 100 105 110 115 120 Up 22 # of Quarters Down 6 Downside% Average Return (%) vs. Market Up Market 7.55 Down Market -6.79 Best 18.92 Quarter (%) 1-Year (%) Market Benchmark (%) Worst -23.71 Best 42.52 Worst -8.56 Up Capture 104.8 Down Capture 85.8 R-Squared 91.09 21 7 7.23-8.21 16.44-21.81 38.69-9.74 100.1 99.7 99.97 22 6 7.23-6.53 17.08-19.91 41.32-3.23 100.1 82.0 98.27 21 7 7.19-7.26 15.59-21.38 39.46-7.14 99.5 90.0 98.12 21 7 7.22-8.24 16.25-21.87 38.82-9.76 100.0 100.0 100.00 7
Multi-Statistic October 2009 - September 2016 7 : Morgan Stanley 6 5 4 3 2 1 0 Alpha vs. Market Multi-Statistic (Custom Table) Beta vs. Market October 2009 - September 2016: Summary Statistics Alpha vs. Market Excess Return vs. Market Beta vs. Market Sharpe Ratio Excess Return vs. Market Information Ratio vs. Market Sharpe Ratio Pain Ratio Information Ratio vs. Market Pain Ratio 3.04% 0.96 2.66% 0.87 0.51 6.19 0.06% 1.00 0.05% 0.72 0.17 3.70 2.70% 0.93 2.11% 0.90 0.86 6.33 1.57% 0.95 1.09% 0.81 0.45 4.55 0.00% 1.00 0.00% 0.72 0.00 3.67 8
Manager Monroe vs County Benchmark: Multi-Statistic October 2009 - September 2016 (not annualized if less than 1 year) : Morgan Stanley 18.00% Standard Deviation 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years Downside Deviation (MAR = 0.00%) 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years 5.00 Sharpe Ratio 4.00 3.00 2.00 1.00 0.00 YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years 9
Histogram of Returns October 2009 - September 2016 30 : Morgan Stanley 25 Percentage of Quarters (%) 20 15 10 5 0 < -24-24 to -20-20 to -16-16 to -12-12 to -8-8 to -4-4 to 0 0 to 4 4 to 8 8 to 12 12 to 16 > 16 Histogram of Returns (Custom Table) October 2009 - September 2016: Summary Statistics Returns Range (%) Skewness Kurtosis Standard Deviation # of Down Periods Average Down Return Downside Deviation (MAR = 0.00%) # of Up Periods Average Up Return Upside Deviation (MAR = 0.00%) Omega (MAR = 0.00%) Sortino Ratio (MAR = 0.00%) -1.11 2.65 17.33% 6-8.58% 10.24% 22 7.39% 15.73% 3.16 1.48-1.02 1.43 17.28% 7-8.21% 10.59% 21 7.23% 14.87% 2.64 1.18-0.94 1.55 16.20% 6-8.06% 9.39% 22 7.02% 14.91% 3.19 1.56-1.11 1.88 16.56% 7-7.48% 10.05% 21 7.26% 14.64% 2.91 1.35-1.03 1.44 17.29% 7-8.24% 10.62% 21 7.22% 14.85% 2.63 1.18 10
Excess Return vs. Market Benchmark / Time October Monroe 2009 - September County 2016 (20-Quarter Moving Windows, Computed Quarterly) 6% : Morgan Stanley Excess Return vs. 5% 4% 3% 2% 1% 0% Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Time Std Dev of Excess Return vs. Market Benchmark / Time October 2009 - September 2016 (20-Quarter Moving Windows, Computed Quarterly) 7% Std Dev of Excess Return vs. 6% 5% 4% 3% 2% 1% 0% Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Time 11
Excess Return vs. Market Benchmark / Batting Average vs. Market Benchmark October Monroe 2009 - September County 2016 (Single Computation) 3% : Morgan Stanley Excess Return vs. 2.5% 2% 1.5% 1% 0.5% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Batting Average vs. Batting Average vs. Market Benchmark / Time October 2009 - September 2016 (20-Quarter Moving Windows, Computed Quarterly) 100% Batting Average vs. 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Time 12
Drawdown October 2009 - September 2016 0% : Morgan Stanley -5% -10% -15% -20% -25% Q3 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q3 2016 Max Drawdown Max Drawdown Begin Date Max Drawdown End Date Max Drawdown Length Max Drawdown Recovery Date Pain Index Pain Ratio Omega (MAR = 0.00%) Gain to Loss Ratio High Water Mark Date To High Water Mark -26.03% Apr 2011 Sep 2011 2 Dec 2012 2.44% 6.19 3.16 0.86 Jul 2016 0.00% -23.08% Apr 2011 Sep 2011 2 Sep 2012 3.37% 3.70 2.64 0.88 Jul 2016 0.00% -20.01% Apr 2011 Sep 2011 2 Mar 2012 2.29% 6.33 3.19 0.87 Jul 2016 0.00% -22.27% Apr 2011 Sep 2011 2 Mar 2012 2.96% 4.55 2.91 0.97 Jul 2016 0.00% -23.12% Apr 2011 Sep 2011 2 Sep 2012 3.38% 3.67 2.63 0.88 Jul 2016 0.00% 13
Manager vs Zephyr Small Core Universe (Morningstar): Return October 2009 - September 2016 (not annualized if less than 1 year) 25 : Morgan Stanley 20 Return 15 10 5th to 25th Percentile 25th Percentile to Median Median to 75th Percentile 75th to 95th Percentile 5 0 YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years Manager vs Zephyr Small Core Universe (Morningstar): Return October 2009 - September 2016 (not annualized if less than 1 year) YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years Median 126 mng 9.83% 126 mng 13.09% 117 mng 7.58% 109 mng 6.57% 105 mng 12.18% 101 mng 15.56% 99 mng 12.40% 98 mng 12.68% 11.59% 19.47% 15.44% 13.10% 17.26% 20.30% 14.92% 15.15% 11.54% 15.53% 8.17% 6.73% 12.15% 15.86% 12.39% 12.54% 13.86% 18.17% 10.64% 8.99% 14.24% 17.83% 14.69% 14.60% 11.50% 14.97% 7.14% 7.92% 13.10% 16.70% 13.31% 13.58% 11.46% 15.47% 8.12% 6.71% 12.12% 15.82% 12.35% 12.49% 14
Manager vs Zephyr Small Core Universe (Morningstar): Return Rank October 2009 - September 2016 (20-Quarter Moving Windows, Computed Quarterly) 0% : Morgan Stanley 25% Return Rank Median 75% 5th to 25th Percentile 25th Percentile to Median Median to 75th Percentile 75th to 95th Percentile 100% Q3 2014 Q4 2014 Q2 2015 Q4 2015 Q2 2016 Q3 2016 Manager vs Zephyr Small Core Universe (Morningstar): Return Rank October 2009 - September 2016 (20-Quarter Moving Windows, Computed Quarterly) Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016 Sep 2016 105 mng 104 mng 104 mng 104 mng 104 mng 103 mng 103 mng 103 mng 101 mng 43.84% 37.34% 45.72% 36.84% 13.28% 7.19% 0.96% 0.00% 0.00% 52.70% 48.82% 58.02% 50.42% 54.70% 56.04% 59.19% 49.50% 37.23% 21.22% 20.61% 27.25% 27.28% 13.37% 13.88% 4.69% 2.40% 7.01% 20.53% 26.80% 34.01% 28.02% 28.04% 27.38% 24.18% 16.68% 21.42% 54.36% 49.15% 58.85% 50.43% 55.48% 56.09% 61.05% 51.58% 37.95% 15
Manager Monroe vs County Zephyr Small Core Universe (Morningstar): Multi-Statistic October 2009 - September 2016 (not annualized if less than 1 year) : Morgan Stanley 25.00% 20.00% Alpha 15.00% 10.00% 5.00% 0.00% -5.00% 5th to 25th Percentile 25th Percentile to Median Median to 75th Percentile 75th to 95th Percentile -10.00% YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years 1.00 Information Ratio 0.00-1.00-2.00-3.00 5th to 25th Percentile 25th Percentile to Median Median to 75th Percentile 75th to 95th Percentile -4.00 5.00 YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years Sharpe Ratio 4.00 3.00 2.00 1.00 5th to 25th Percentile 25th Percentile to Median Median to 75th Percentile 75th to 95th Percentile 0.00 YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years 16
Annualized Excess Return / Standard Deviation of Excess Return (vs. ) October Monroe 2009 - September County 2016 (Single Computation) 3% : Morgan Stanley 2.5% Excess Return 2% 1.5% 1% 0.5% 0% 0% 1% 2% 3% 4% 5% Standard Deviation of Excess Return Annualized Excess Return / Standard Deviation of Excess Return (vs. ) October 2009 - September 2016 (20-Quarter Moving Windows, Computed Quarterly) 6% 5% Excess Return 4% 3% 2% 1% 0% 0% 1% 2% 3% 4% 5% 6% Standard Deviation of Excess Return 17
: Morgan Stanley Correlation Matrix: Returns vs. October 2009 - September 2016 (1) (2) (3) (4) (5) 1) 1.00 2) 0.95 1.00 3) 0.97 0.99 1.00 4) 0.96 0.99 0.99 1.00 5) 0.95 1.00 0.99 0.99 1.00 18
Periodic Monroe Returns County January 2012 - September 2016 : Morgan Stanley Q1 Q2 Q3 Q4 Year 2016 2015 2014 3.96 4.65 0.08 5.63 2.15 2.78 1.62-5.07-5.28-7.06 9.92 11.59 8.64 7.10 2013 13.84 3.22 8.86 11.42 42.52 2012 13.13-5.51 4.81 2.18 14.49 2016-1.47 3.93 8.92-11.54 2015 4.30 0.39-11.91 3.58-4.47 2014 1.11 2.12-7.36 9.80 5.03 2013 12.31 2.72 10.68 8.62 38.69 2012 12.63-3.45 5.29 1.92 16.69 2016 2.63 3.55 7.14-13.86 2015 3.85 0.17-9.30 3.78-2.07 2014 1.21 2.06-6.68 9.80 5.85 2013 11.77 4.04 10.78 9.70 41.32 2012 12.05-3.62 5.46 2.11 16.29 2016 1.00 3.98 6.17-11.50 2015 4.81-0.56-10.33 3.11-3.64 2014 2.59 3.77-5.49 6.84 7.50 2013 12.84 2.77 9.19 8.84 37.81 2012 12.96-3.45 5.47 2.79 18.24 2016-1.52 3.79 9.05-11.46 2015 4.32 0.42-11.92 3.59-4.41 2014 1.12 2.05-7.36 9.73 4.89 2013 12.39 3.08 10.21 8.72 38.82 2012 12.44-3.47 5.25 1.85 16.35 19
Disclosures 20
Aberdeen U.S. Small Cap Equity Fund (Formerly the Aberdeen Small Cap Fund¹) September 2016 Performance Data and Portfolio Composition Total Returns (%) Class A w/o sales charges Class A with sales charges Institutional Class Index Annual Calendar Year Returns (%) Cumulative as of Sep 30, 2016 Annualized as of Sep 30, 2016 1 Mo 3 Mo YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Since Inception 11/02/98-1.00 1.57 11.35 19.14 12.76 19.93 7.15 10.15-6.69-4.27 4.95 12.29 10.55 18.52 6.51 9.78-0.98 1.62 11.59 19.47 13.10 20.30 7.47 10.44 1.11 9.05 11.46 15.47 6.71 15.82 7.07 8.21 2015 2014 2013 2012 2011 2010 2009 2008 Class A w/o sales charges 8.29 6.73 42.15 14.07-6.33 27.72 37.53-44.88 Institutional Class 8.64 7.10 42.52 14.49-6.02 28.07 37.95-44.72 Index -4.41 4.89 38.82 16.35-4.18 26.85 27.17-33.79 PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. The performance data quoted represents past performance and current returns may be lower or higher. Class A shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to aberdeen-asset.us. Objective The Fund seeks long-term capital appreciation. Strategy The Fund invests in equities of U.S. small-cap companies. We look for companies with sound or improving prospects and supportive valuations and hold them for the long term. Our fundamental, bottom-up investment approach is based on a rigorous and disciplined proprietary research effort. Total Net Assets (all share classes) $1,132.84 million Portfolio Management Aberdeen North American Equity Team Risk Considerations Equity stocks of small-cap companies generally carry greater risk and more volatility, and may be more illiquid, than equity stocks of larger, more established companies. Please read the prospectus for more detailed information regarding these and other risks. Returns prior to 6/23/08 reflect the performance of a predecessor fund. Please consult the Fund's prospectus for more detail. Total returns assume the reinvestment of all distributions. Total returns may reflect a waiver of part of the Fund's fees for certain periods since inception, without which returns would have been lower. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. ¹As of February 29, 2016, the Fund name changed from Aberdeen Small Cap Fund. Fund Facts Net Asset Value (NAV) as of 09/30/16 Ticker CUSIP Minimum Initial Investment Gross/Net Expense Ratio Distributions Class A Class C Institutional Class $29.82 $26.11 $31.29 GSXAX GSXCX GSCIX 003020716 003020682 003020666 $1,000 $1,000 $1,000,000 1.48%/1.48% 2.23%/2.15% 1.22%/1.15% Annual Distributions/Annual Capital Gains Expenses stated as of the fund's most recent prospectus. All classes of the Fund have contractual waivers in place until 2/28/17 or the effective date of the 2017 annual update to the registration statement, whichever occurs first. Investors should carefully consider a fund s investment objectives, risks, fees, charges and expenses before investing any money. To obtain this and other fund information, please call 866-667-9231 to request a summary prospectus and/or prospectus, or download at aberdeen-asset.us. Please read the summary prospectus and/or prospectus carefully before investing any money. Investing in mutual funds involves risk, including possible loss of principal. There is no assurance that the investment objective of any fund will be achieved. Aberdeen Funds and Aberdeen Investment Funds are distributed by Aberdeen Fund Distributors LLC, Member FINRA and SIPC. 1735 Market Street, 32nd Floor, Philadelphia, PA 19103. Aberdeen is a U.S. registered service mark of Aberdeen Asset Management PLC. NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
Aberdeen U.S. Small Cap Equity Fund (Formerly the Aberdeen Small Cap Fund) Sector Breakdown vs. Benchmark (%) Fund Benchmark Difference Industrials 22.4 14.1 8.3 Materials 11.0 4.7 6.3 Consumer Staples 5.7 3.0 2.7 Telecommunications 2.8 0.8 2.1 Consumer Discretionary 13.8 12.6 1.3 Energy 2.1 3.2-1.1 Financials 16.2 17.5-1.3 Health Care 11.9 14.2-2.3 Utilities 0.0 3.8-3.8 Real Estate 1.7 8.2-6.5 Information Technology 11.2 18.1-6.9 Cash 1.2 0.0 1.2 Figures may not sum due to rounding. Top Ten Holdings % of Portfolio Quaker Chemical Corp 3.1 Parexel International Corp 3.1 Beacon Roofing Supply 3.0 Shenandoah Telecommunications 2.8 Littelfuse 2.8 Multi-Color Corp 2.7 Sensient Technologies Corp 2.7 Fair Isaac Corp 2.6 US Ecology Inc 2.6 Gibraltar Industries 2.5 Percent of Portfolio in Top Ten 27.8 Figures may not sum due to rounding. Holdings are subject to change and are provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities shown. Portfolio Characteristics Fund Benchmark Number of Holdings (not including cash) 47 1,959 Weighted Average Market Cap (bn USD) 2.1 1.8 Beta 0.7 1.0 Alpha 7.4 0.0 Standard Deviation 11.3 14.4 R-Squared 85.5 100.0 Sharpe Ratio 1.1 0.4 The Beta, Alpha, Standard Deviation and R-Squared are based on a 36-month rolling period. Definitions The Index is an unmanaged index considered representative of U.S. small cap stocks. Beta is a measure of the volatility of a portfolio in comparison to a benchmark index. Alpha is a measure of performance that takes the volatility of a mutual fund and compares its risk-adjusted performance to a benchmark index. Standard deviation measures historical volatility. R-squared is a statistical measurement that determines the proportion of a fund's return that can be explained by variations in the market, as measured by a benchmark index. Sharpe ratio measures risk-adjusted performance. Aberdeen Funds 1735 Market Street, 32nd Floor Philadelphia, PA 19103 Shareholder services and 24-hour account access: 866-667-9231 Advisor Services Team: 800-485-2294 Website : aberdeen-asset.us SMALL CAP FS
Fact Sheet September 30, 2016 Vanguard Small-Cap Index Fund Domestic stock fund Admiral Shares Overall risk level Low High Total net assets Expense ratio as of 04/27/16 Ticker symbol Inception date 1 2 3 4 5 $25,413 MM 0.08% VSMAX 11/13/00 0548 Fund number Investment objective Vanguard Small-Cap Index Fund seeks to track the performance of a benchmark index that measures the investment return of small-capitalization stocks. Investment strategy The fund employs an indexing investment approach designed to track the performance of the CRSP US Small Cap Index, a broadly diversified index of stocks of smaller U.S. companies. The fund attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. Benchmark Spliced Small Cap Index Growth of a $10,000 investment : January 31, 2006 December 31, 2015 $19,917 Fund as of 12/31/15 $19,787 Benchmark as of 12/31/15 Annual returns 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Fund 15.77 1.24-36.00 36.33 27.89-2.69 18.24 37.81 7.50-3.64 Benchmark 15.77 1.20-36.20 36.15 27.82-2.75 18.20 37.77 7.54-3.68 Total returns Periods Ended September 30, 2016 Quarter Year to Date One Year Three Years Five Years Ten Years Fund 6.17% 11.50% 14.97% 7.92% 16.70% 8.42% Benchmark 6.15% 11.47% 14.93% 7.91% 16.68% 8.35% The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so investors shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month end, visit our website at vanguard.com/performance. Figures for periods of less than one year are cumulative returns. All other figures represent average annual returns. Performance figures include the reinvestment of all dividends and any capital gains distributions. All returns are net of expenses. Top sector holdings Stocks Financials 26.6% Industrials 19.2 Consumer Services 12.1 Technology 12.1 Health Care 9.9 Consumer Goods 7.1 Oil & Gas 4.8 Utilities 4.0 Basic Materials 3.8 Telecommunications 0.4 Spliced Small Cap Index: Index through May 16, 2003; MSCI US Small Cap 1750 Index through January 30, 2013; CRSP US Small Cap Index thereafter. F0548R 092016
Fact Sheet September 30, 2016 Vanguard Small-Cap Index Fund Domestic stock fund Admiral Shares Ten largest holdings* 1 Arthur J Gallagher & Co. 2 Newfield Exploration Co. 3 Regency Centers Corp. 4 Westar Energy Inc. 5 Broadridge Financial Solutions Inc. 6 UGI Corp. 7 Targa Resources Corp. 8 Atmos Energy Corp. 9 Packaging Corp. of America 10 Valspar Corp. Top 10 as % of Total Net Assets 3.0% *The holdings listed exclude any temporary cash investments and equity index products. Connect with Vanguard > vanguard.com Plain talk about risk An investment in the fund could lose money over short or even long periods. You should expect the fund s share price and total return to fluctuate within a wide range, like the fluctuations of the overall stock market. The fund s performance could be hurt by: Stock market risk: The chance that stock prices overall will decline. Stock markets tend to move in cycles, with periods of rising stock prices and periods of falling stock prices. The fund s target index may, at times, become focused in stocks of a particular sector, category, or group of companies. Because the fund seeks to track its target index, the fund may underperform the overall stock market. Investment style risk: The chance that returns from small-capitalization stocks will trail returns from the overall stock market. Historically, small-cap stocks have been more volatile in price than the large-cap stocks that dominate the overall market, and they often perform quite differently. For more information about Vanguard funds or to obtain a prospectus, see below for which situation is right for you. If you receive your retirement plan statement from Vanguard or log on to Vanguard s website to view your plan, visit vanguard.com or call 800-523-1188. If you receive your retirement plan statement from a service provider other than Vanguard or log on to a record keeper s website that is not Vanguard to view your plan, please call 855-402-2646. Visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing. Financial advisor clients: For more information about Vanguard funds, contact your financial advisor to obtain a prospectus. Investment Products: Not FDIC Insured No Bank Guarantee May Lose Value 2016 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor. F0548R 092016