https://www.sec.gov/Archives/edgar/data/794105/000093247119007082/ltbond497052019.htm
497 1 ltbond497052019.htm VANGUARD LONG-TERM BOND INDEX FUND 497
Vanguard Long-Term Bond Index Fund
Supplement Dated May 10, 2019, to the Prospectus and Summary Prospectus for Investor Shares and Admiral™ Shares Dated April 26, 2019
Effective July 10, 2019, the Fund will charge a 0.50% fee on all purchases of its Investor Shares and Admiral Shares, including shares that you purchase by exchange from another Vanguard fund. Purchases that result from reinvested dividend or capital gains distributions are not subject to the purchase fee.
Unlike a sales charge or a load paid to a broker or a fund management company, purchase fees are paid directly to the Fund to offset the costs of buying securities. This fee is separate from, and in addition to, other expenses charged by the Fund.
Prospectus and Summary Prospectus Text Changes
Effective July 10, 2019, the following will replace similar text under the heading “Fees and Expenses” in the Fund Summary section:
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and hold Investor Shares or Admiral Shares of the Fund.
Shareholder Fees
(Fees paid directly from your investment)
Investor Shares Admiral Shares
Sales Charge (Load) Imposed on Purchases None None
Purchase Fee 0.50% 0.50%
Sales Charge (Load) Imposed on Reinvested Dividends None None
Redemption Fee None None
Account Service Fee (for fund account balances
below $10,000) $20/year $20/year
Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)
Investor Shares Admiral Shares1
Management Fees 0.13% 0.04%
12b-1 Distribution Fee None None
Other Expenses 0.02% 0.03%
Total Annual Fund Operating Expenses 0.15% 0.07%
1 The expense information shown in the table reflects estimated amounts for the current fiscal year.
Examples
The following examples are intended to help you compare the cost of investing in the Fund’s Investor Shares or Admiral Shares with the cost of investing in other mutual funds. They illustrate the hypothetical expenses that you would incur over various periods if you were to invest $10,000 in the Fund’s shares. These examples assume that the shares provide a return of 5% each year and that total annual fund operating expenses remain as stated in the preceding table. You would incur these hypothetical expenses whether or not you were to redeem your investment at the end of the given period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
Investor Shares $65 $98 $134 $241
Admiral Shares $57 $72 $89 $139
Prospectus Text Changes
In the More on the Funds section, a new section “Purchase and Transaction Fees” will be added after the “Temporary Investment Measures” section:
Purchase and Transaction Fees
Vanguard Long-Term Bond Index Fund charges a fee of 0.50% on all purchases of shares, including shares that you purchase by exchange from another Vanguard fund.
In addition, Vanguard Total Bond Market Index Fund, Vanguard Short-Term Bond Index Fund, and Vanguard Intermediate-Term Bond Index Fund each reserve the right to charge the following transaction fees to investors whose aggregate share purchases into a Fund equal or exceed the following amounts:
Vanguard Fund Transaction Fee Aggregate Purchases
Total Bond Market Index Fund 0.25% Over $500 million
Short-Term Bond Index Fund 0.15 Over $200 million
Intermediate-Term Bond Index Fund 0.25 Over $100 million
Each of the Vanguard Total Bond Market Index Fund, Vanguard Short-Term Bond Index Fund, and Vanguard Intermediate-Term Bond Index Fund may impose these transaction fees if an investor’s aggregate purchases into a Fund over a 12-month period exceed, or are expected to exceed, the indicated amounts upon notice to the client in conjunction with a purchase that triggers application of the fees. The transaction fees will be assessed only if the client elects to proceed with the purchase. Generally, these fees will not apply to transactions coordinated in advance between a client and Vanguard.
Unlike a sales charge or a load paid to a broker or a fund management company, purchase and transaction fees are paid directly to the Fund to offset the costs of buying securities.
See Investing With Vanguard for more information about fees.
In the Investing With Vanguard section, the following will replace similar text that begins with the heading “Transaction Fees on Purchases”:
Purchase and Transaction Fees
Vanguard Long-Term Bond Index Fund charges a fee of 0.50% on purchases of shares, including shares that you purchase by exchange from another Vanguard fund.
In addition, Vanguard Total Bond Market Index Fund, Vanguard Short-Term Bond Index Fund, and Vanguard Intermediate-Term Bond Index Fund each reserve the right to charge the following transaction fees to investors whose aggregate share purchases into a Fund equal or exceed the following amounts:
Vanguard Fund Transaction Fee Aggregate Purchases
Total Bond Market Index Fund 0.25% Over $500 million
Short-Term Bond Index Fund 0.15 Over $200 million
Intermediate-Term Bond Index Fund 0.25 Over $100 million
Each of the Vanguard Total Bond Market Index Fund, Vanguard Short-Term Bond Index Fund, and Vanguard Intermediate-Term Bond Index Fund may impose these transaction fees if an investor’s aggregate purchases into a Fund over a 12-month period exceed, or are expected to exceed, the indicated amounts upon notice to the client in conjunction with a purchase that triggers application of the fees. The transaction fees will be assessed only if the client elects to proceed with the purchase. Generally, these fees will not apply to transactions coordinated in advance between a client and Vanguard.
Purchase fees will not apply to Vanguard fund account purchases in the following circumstances: (1) purchases of shares through reinvested dividends or capital gains distributions; (2) share transfers, rollovers, or reregistrations within the same fund; (3) conversions of shares from one share class to another in the same fund; (4) purchases in kind; and (5) share rollovers to an IRA within the same Vanguard fund for plans in which Vanguard serves as a recordkeeper. Unlike a sales charge or a load paid to a broker or a fund management company, purchase and transaction fees are paid directly to the Fund to offset the costs of buying securities.
© 2019 The Vanguard Group, Inc. All rights reserved.
Vanguard Marketing Corporation, Distributor...
(includes institutional classes also)

Thanks @lewis and @msf for confirming my correct decision some years ago to stay clear of Wintergreen. The smell of the tobacco was enough to deter me, but you have pointed out other good reasons.

While there's little here that I disagree with, I do wonder how relevant it is to the past five years - the ones M* characterized as growth leaning. Yes, traditional value metrics like P/E were skewed following GFC. But was that still true from 2013 onward?
Yes, tobacco stocks have traditionally been regarded as value stocks, and troubled in the 90s due to the anticipated 1998 settlement. But these days? I'm having a hard time finding value funds with tobacco stocks in their top 25 holdings. I spot checked DODGX, LLPFX, VEIRX, TAVFX, PRFDX (MO is #23 at 1.37%), MDISX (BATS is #21 at 1.50%), YAFFX (KT&G is #25 at 0.68%), TBGVX. Maybe I'm just not looking at the right funds, but it looks like value funds aren't finding much "value" in tobacco.
We can each define value investing however we want. Just look at Bill Miller. I think your observation about concentration and protection goes a long way toward explaining the failure of this fund, value or not.

Certainly that describes the fund's portfolio now. Looking at its performance graph (e.g. in the latest [Dec 2018] annual report), one can see it diverge sharply from the S&P 500 starting around 2012-2013. It also significantly underperformed its category starting around 2012, with the exception of 2016.
The fund has been investing in Consolidated Tomoka since 2006. Going along with your comment about Berkowitz, Wintergreen held a significant portion of Consolidated Tomoka (over 5%) since day one. But it didn't represent an excessively large portion of the fund until the last 2-3 years. So while this stock holding does help explain more recent problems (thanks!), there's more to the story than one stock and a manager's obsession with it.
At the end of 2013 CTO represented about 2.6% of Wintergreen. The fund's top holdings were Jardines (7%), Swatch (7%), and Berkshire Hathaway, with a good amount of tobacco thrown in (BAT and Reynolds, over 10% combined).
At the end of 2014, tobacco moved up, with Reynolds in top spot (7.3%) but also BAT (6.8%) and Altria (4.7%). Consolidated Tomoka appears in the top ten at 4.7%, primarily through appreciation (50%+) but also because of some AUM shrinkage (15%). The fund continued to hold the same number of shares as it had since 2012; they represented 21% of CTO. (The 2014 annual report has a discussion of this holding.)
By the end of 2015, Consolidated Tomoka had grown enough to have become the fund's second largest holding (9.3%). Again, with no additional stock purchases, and with tobacco still the dominant holding - Reynolds (12.4%), BAT (8.5%), Altria (6.3%). CTO's performance (down around 6%) was in line with the fund's 2015 performance (down7%). The rise to 2nd largest holding was thus due to the fact that people were pulling money out of the fund and Winters didn't sell off CTO pro-rata. AUM dropped over 50%.
So arguably it wasn't until 2016 that CTO began to dominate the fund. But Winters also continued favoring tobacco during this period. By the end of 2016, CTO constituted 13.9% of the fund, while tobacco kept pace, with Reynolds now at 19.5%, BAT at 9.4%, and Altria at 7%. Tobacco stocks now accounted for three of the four largest holdings. CTO was essentially flat on the year, while the fund itself performed well relative to its peers, gaining 6.67%.
Once again, the increased fraction of the fund that CTO represented was a result of people pulling money out of the fund (AUM down nearly 1/3) and Winters hanging on to CTO, and onto the tobacco stocks. Note also that real estate didn't grow much as a fraction of the fund in 2016 (just to 13.9% up from 13.5%), because Winters gave up on his other real estate holding, Sun Hung Kai.
By the end of 2017, CTO was the fund's largest holding, at 20.4%. BAT (now owning Reynolds) was 16.1%, and Altria 5.7%. That was a result of CTO appreciating 20% and AUM shrinking 20%. Again, no change in the number of shares owned by the fund.
Finally, by the end of 2018, CTO represents 42.6% of the company (despite underperforming in 2018), BAT is still the second largest holding, but that's just 5.9% of the fund. Tobacco and every other stock have become nearly immaterial.

FYI: Quantitative investment strategies suffered poor performance last year, but there isn’t one intuitive way to pinpoint exactly why it happened, said Cliff Asness, managing principal and chief investment officer at AQR Capital Management.
It’s easier to explain why one individual component of a multifactor strategy underperformed, such as why the value factor lagged, he said. But explaining total performance in down years is difficult, especially over the short to medium term.
Regards,
Ted
https://www.fa-mag.com/news/aqr-s-asness--no-simple-explanation-for-quant-failure-in-2018-44771.html?print

Thanks for explaining that @MikeM. Too many different funds from TRP nowadays if you ask me, but I guess they need that to remain competitive. Have to wonder if they couldn’t rename that static fund category. It need not be solely for retirement. May be good reasons someone wants a particular risk exposure regardless of years to retirement.
20-25 years ago I could name most of TP’s funds and explain what they were all about. Today it’s hopeless.
Another thought. That “allocation fee” Oppenheimer slaps on their allocation funds - might make sense if the underlying funds they hold are some type of institutional class or otherwise paying a lower ER. I doubt that’s the case, but might be worth someone’s time to check on it.

Yes, very good article. I never really thought of balanced funds as "target risk" funds, but it's true. For over thirty years we maintained a substantial investment in American Century's "Strategic Allocation (Moderate)", a "balanced" fund. There were three types offered: "Conservative", "Moderate", and "Aggressive".
When I now look at the American Century site, this family of funds is no longer called "Balanced"- now they are called "Target Risk", and the spectrum has been expanded to five allocation models, from "Very Conservative" to "Very Aggressive".
I would venture that their "Target Date" offerings are more than likely very similar (if not identical) in makeup to the "Target Risk" funds, but simply moving your position down the spectrum from Aggressive to Conservative as time elapses and the target date becomes near.
I haven't looked at details with respect to any possible "allocation fees" for this product at American Century, but there were no such fees with respect to the old "balanced fund" approach.

FYI: While stocks staged a remarkable comeback from Monday’s deep decline, they still closed in the red. A day later, and the sellers are back at it.
Long-suffering market bears, like John Hussman, have to be savoring this kind of action. After all, when things turn south, Hussman’s fortunes turn north.
In fact, riding the cred he earned from calling prior market collapses, his assets under management swelled to almost $7 billion. Now, however, after years of underperformance, that figure stands at a fraction of what it once was.
Hussman’s flagship $312-million Strategic Growth Fund HSGFX, +0.17% , which focuses on “the protection of capital during unfavorable market conditions,” has had a rough go of it during this relentless bull market, shedding almost 9% a year, on average, since 2014, according to Morningstar.
Regards,
Ted
https://www.marketwatch.com/story/ho-hum-a-65-market-plunge-would-be-run-of-the-mill-fund-manager-says-2019-05-07/print

@Derf - Great article. Please come to the front of the class!
I hadn’t heard the trim “target risk fund” before this. But they make good sense. With target date funds you’re making a lot of assumptions about the future. What will your situation be 20 years down the road? What will your home and other acquired assets be worth than? Your health and family situation? Will you still feel like working than?
Target risk funds attempt to maintain a static level of risk suitable for current situation. I’m reminded of a series of funds Oppenheimer offers. They have a series of four or five ranging from asset allocation - conservative all the way out to asset allocation - aggressive. Allocations remain static. Investors may shift from one to another as their life situation evolves. Big problem with Oppenheimer’s is that they charge an “allocation fee” on top of the fees incurred from the underlying funds. However, I’m sure you could find something similar from T. Rowe and others without the added fee.

@Derf, no mutual funds, all ETFs. They use mostly their own. Out of 20 ETFs in the portfolio, 14 of them are Schwab. There are a couple others, Vanguard, ishares , Vaneck.
I don't plan to make any changes right now. I've held it for about 3 years now. I plan to reconsider the robo when interest rates start to climb and the Fed starts to raise rates again. That would be because of the large, low interest cash position they hold. Who wants to hold 12% of their portfolio in cash making < 1/2 % when CDs will be climbing to 3, 4, 5% ?
Anyway, I think it's a decent option to consider for the hands off approach, especially for those who just can't help tinkering with their portfolios. But, there are other options too.
Oh, forgot to mention, a benefit to the Schwab Intelligent Portfolio is a very low cost personal advisory service. I haven't done that yet, but I might.

@jerry : try googling headline.
Derf

It’s better to google the exact passage that’s been cut and pasted here (without proper punctuation and attribution). That’s because editors often alter the title from one publication to another. But the text should remain mostly unchanged.
Well, we seem to have hashed and rehashed target date funds over the past couple years. No two are the same - nor do they claim to be. What’s in a name? Very little. Best to read and understand the prospectus, look at how the fund is currently allocated and than do your own analysis of how you’d expect it to perform. Very few here appear to use them.
Admittedly, many are sold to investors with limited financial knowledge or experience. But given regular contributions and enough years left untouched, virtually all these funds should profit the individual better than had he / she stashed the money under the mattress or in a low yielding savings account. Since many are bought within a workplace plan, let us hope the employer has done his homework and acted in good faith on the part of the employees. It’s important to use funds with lower fees.

FYI: A decade after target-date funds were damaged during the financial crisis, they have re-emerged bigger than ever as retirement investments. But they still have vulnerabilities.
Regards,
Ted
https://www.wsj.com/articles/what-weve-learned-about-target-date-funds-10-years-later-11557108540?mod=article_inline

How can there be "long-term" robo data when the concept is only a couple of years old, if that?

@Art- Well, since the funds that you mentioned are only 10% of your portfolio, that gives a much better overall picture. It's reasonable to surmise that the other 90% is invested so as to give you decent diversity. In that case, it seems perfectly reasonable to reduce a number of similar funds to only one or two. I'll leave the specific recommendations on that to the other folks here, who have a better idea of funds which are currently doing a decent job.
We, like Ted, are now disinvested in the general market except for a very small part of our resources. During our accumulation years we primarily used American Funds, and while they certainly have some excellent funds with reasonable ERs, I can't recommend that anyone invest in a load fund in this day and age.
Best of luck!

@ MikeM:From statement below you said,"
Over the last 5 years or so I've simplified my self-managed portfolio to about 8 funds that I feel good about. That's 1/2 the pot. The other 1/2 is in a well diversified robo.
Would you care to let the cat out of the bag, & report which did better for 4/th Qter 2018 ?
I'm thinking I may put some money to work in a robo or directed account.
Thanks for your're time , Derf

Congrats on your coming retirement Art. I'm about there myself, but will probably work part time to ease into retirement.
Over the last 5 years or so I've simplified my self-managed portfolio to about 8 funds that I feel good about. That's 1/2 the pot. The other 1/2 is in a well diversified robo. The 8 self managed funds include equity and fixed income funds. About 20% of that is in 1 balanced fund, PRWCX. I am not a believer in duplicating funds in categories or asset classes but to each their own. I also believe a 1 fund portfolio can be a fine idea coupled with a cash bucket in retirement. That 1 fund would be a target/retirement fund. How simple is that, but I don't think that is what you are looking for.
You, having 7 world/global funds, tells me that you and I have different portfolio building ideas, so I can't offer much help. 1 or 2 of those would be fine in my mind (or none depending on what else you hold). You can't go wrong with TRP (I'd pick PRGSX fwiw), and maybe even holding one of the Grandeur Peek funds might make sense IF they were different enough from TRP.
Good luck to you.

@NumbersGal I have had $'s invested in AKREX for several years. Thanks for the heads up.

Krugman: “What all this tells us is that Republican positioning on economic policy has been in bad faith all these years.”
Nothing new here. Don’t need Paul Krugman to know that. Have already noticed they believe they can “scrounge up” 8.5 bill in unused funds to erect a glorified 18th or 19th century wall - apparently without raising taxes. While same folks can “explain away” food for hungry kids because: “there's no demonstrable evidence“ it helps their performance.
https://www.romper.com/p/trumps-budget-manager-says-feeding-hungry-kids-hasnt-been-proven-to-help-their-performance-45235
(By the way, the fella who did all this explaining has since been promoted.)

This looks at past motives, which appear to have considerable momentum:
https://www.nytimes.com/2019/05/04/opinion/the-sabotage-years.html

FYI: When I was a junior analyst at Sanford Bernstein nearly 25 years ago, our betters drummed into our heads that everything in the investment world went back to normal and that John Templeton was right when he said that the four most expensive words in the English language were “this time it’s different.” Bernstein had a sophisticated computer model that we referred to as the black box; its job was to tell us worker bees the most statistically cheap sectors every month. Like good worker bees, we would more or less automatically buy the stocks in those sectors and sell stocks in the most expensive sectors. The black box minted money for the firm and its clients for decades, precisely because everything did eventually return to normal. Cheap auto stocks appreciated to fair value, expensive tech stocks returned to average, and the investing world was good—safe and predictable. It was indeed dangerous to think “this time it’s different.”
Regards,
Ted
https://www.barrons.com/articles/reversion-to-the-mean-is-dead-investors-beware-51556912141?mod=past_editions