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Home My Public Portal About2016 1st Quarter ReportPerformance Review Metropolitan St. Louis Sewer District Defined Contribution Plan 1st Quarter 2016 Pavilion Advisory Group Inc. 227 W. Monroe Street, Suite 2020 Chicago, IL 60606 Phone: 312-798-3200 Fax: 312-902-1984 www.pavilioncorp.com 1 Executive Summary 1 2 Performance Summary 4 3 Plan Assets 12 4 Manager Evaluation 15 5 Capital Markets Review 49 Table Of Contents Executive Summary 1 Performance Summary - March 2016 First quarter equity and fixed income index fund returns were positive and ranked favorably within their style-specific peer universes. The active equity funds lagged their respective benchmarks during the quarter. Balanced and target retirement date fund returns were positive, with the more conservatively positioned shorter-dated funds being the best absolute performers. Plan Assets The investment menu provides a combination of single strategy funds and diversified portfolios including a balanced fund and target retirement date funds. The retirement dates range from 2010 through 2060 in five year increments. Manager Evaluation Vanguard is a market leader and well known for its low cost market index and institutional investment funds. Jim Barrow stepped down as PM of Vanguard Windsor II at the end of 2015. He had managed Barrow Hanley’s portion of Windsor II assets (approximately 60%) since 1985. As had already been well- communicated over the past couple of years, his replacements are David Ganucheau and Jeff Fahrenbruch. First quarter returns for the active managers in the investment menu were below-benchmarks. Vanguard Windsor II, Vanguard US Growth, and Vanguard International Growth lagged their respective benchmarks by 140, 420, and 160 basis points, respectively. Target retirement date funds approximated their respective benchmarks over longer-term periods. Defined Contribution Plan Executive Summary 2 Defined Contribution Plan Executive Summary Capital Markets Review The S&P 500 finished the quarter in positive territory with a 1.3% return. While the market started the quarter down on continued fears of global instability, a weaker dollar, and ECB bond buying expansion fueled a rally in the latter part of the quarter. With the exception of financials and health care, all sectors posted gains. The Federal Reserve backtracked on its outlook for 100 bps of interest rate hikes during 2016. Markets reacted so negatively during January that the Fed speculated its December rate hike may have been the proximate cause. Other central banks continue to push rates lower or expand bond purchases as global growth forecasts trend lower. The U.S. dollar grew weaker throughout the quarter as persistently weak global demand lowered prospects of monetary tightening. Stock markets remained dependent on easy money policies, especially as earnings growth rates trend lower. An ongoing industrial slowdown, excluding autos, is worrying as indicators point to a low first quarter GDP. Crude oil prices fell to a low of $26/barrel during February, but finished the quarter slightly above the year-end price. The appearance of a deal between OPEC and Russia to stabilize production halted the price decline and led the market to its more natural level around $40-50/barrel. Emerging markets posted strong gains in the first quarter, benefiting from both favorable market returns and currency gains. Latin America was the strongest performing region.Fixed income markets improved during the quarter as accommodative responses from global central banks eased investors’ fears over slowing global growth. Yields declined across the curve after the Fed reduced market expectations for rate hikes in 2016 from four to two. The first quarter saw a reversal in the performance of growth and value stocks, with value outperforming growth, especially in the small-cap space. In general, large cap stocks performed better than small cap stocks. The weakness in the small cap growth segment, however, pulled the overall small cap stock indices down. Recommendations or Action Items No recommendations at this time. 3 Performance Summary 4 Quarter Year To Date 1 Year 3 Years 5 Years 10 Years Domestic Equity Options Vanguard 500 Index (VFINX)1.3 (20)1.3 (20)1.6 (15)11.7 (25)11.4 (17)6.9 (28) S&P 500 1.3 (20)1.3 (20)1.8 (14)11.8 (23)11.6 (15)7.0 (26) IM U.S. Large Cap Equity -0.4 -0.4 -1.8 10.1 9.8 6.1 Vanguard US Growth (VWUSX)-3.5 (61)-3.5 (61)0.2 (35)13.5 (22)12.2 (16)6.9 (51) Russell 1000 Growth Index 0.7 (7)0.7 (7)2.5 (10)13.6 (21)12.4 (14)8.3 (14) IM U.S. Large Cap Growth Equity -2.7 -2.7 -1.2 11.8 10.5 6.9 Vanguard Windsor II (VWNFX)0.2 (49)0.2 (49)-2.9 (41)8.5 (46)9.7 (31)5.8 (30) Russell 1000 Value Index 1.6 (20)1.6 (20)-1.5 (24)9.4 (23)10.2 (15)5.7 (32) IM U.S. Large Cap Value Equity 0.2 0.2 -3.6 8.3 8.6 5.0 Vanguard Mid-Cap Index (VIMSX)1.1 (42)1.1 (42)-4.4 (34)10.6 (19)9.9 (20)7.1 (24) Vanguard Mid-Cap Index Fund Blended Benchmark 1.2 (42)1.2 (42)-4.3 (33)10.8 (16)10.1 (15)7.3 (19) IM U.S. Mid Cap Equity 0.4 0.4 -6.6 8.7 8.1 6.1 Vanguard Small-Cap Index (NAESX)1.0 (36)1.0 (36)-7.2 (36)8.4 (25)8.6 (24)6.7 (10) Vanguard Small-Cap Index Fund Blended Benchmark 1.0 (35)1.0 (35)-7.2 (35)8.5 (23)8.8 (21)6.8 (9) IM U.S. Small Cap Equity -0.4 -0.4 -9.0 6.6 7.1 4.7 International Equity Option Vanguard International Growth (VWIGX)-2.0 (63)-2.0 (63)-7.7 (41)3.1 (28)2.5 (31)3.4 (28) MSCI AC World ex USA (Net)-0.4 (48)-0.4 (48)-9.2 (55)0.3 (61)0.3 (63)1.9 (53) IM International Equity -0.7 -0.7 -8.7 1.3 1.2 2.1 Fixed Income Options Vanguard Total Bond Market Index (VBMFX)3.1 (20)3.1 (20)1.7 (8)2.3 (37)3.6 (62)4.8 (67) Vanguard Total Bond Market Index Fund Benchmark 3.1 (18)3.1 (18)1.9 (5)2.5 (26)3.8 (56)4.9 (61) IM U.S. Broad Market Core+ Fixed Income 2.6 2.6 0.3 2.0 3.9 5.2 Vanguard Retirement Savings Trust 0.5 0.5 1.9 1.8 2.1 2.9 Ryan 3 Yr GIC Master 0.3 0.3 1.2 1.1 1.4 2.8 Performance Summary Investment Options As of March 31, 2016 _________________________ Returns are expressed as percentages. Returns for periods greater than one year are annualized. Peer group percentile ranks are shown in parenthesis. 5 Performance Summary Investment Options As of March 31, 2016 Quarter Year To Date 1 Year 3 Years 5 Years 10 Years Equity/Fixed Income Blend Options Vanguard Balanced Index (VBINX)1.9 (8)1.9 (8)0.6 (10)7.6 (17)8.1 (12)6.4 (10) Vanguard Balanced Index Fund Benchmark 1.9 (8)1.9 (8)0.7 (10)7.8 (13)8.3 (9)6.5 (9) IM Mixed-Asset Target Alloc Growth 0.6 0.6 -3.1 5.8 6.1 4.8 Vanguard Target Retirement Income (VTINX)2.3 (10)2.3 (10)0.4 (4)3.6 (16)5.0 (10)5.2 (7) Vanguard Target Income Composite Index 2.3 (19)2.3 (19)0.6 (3)3.9 (11)5.1 (9)5.3 (6) IM Mixed-Asset Target Today 1.8 1.8 -1.2 2.4 3.7 4.0 Vanguard Target Retirement 2010 (VTENX)2.2 (30)2.2 (30)0.1 (15)4.4 (18)5.5 (17)N/A Vanguard Target 2010 Composite Index 2.2 (31)2.2 (31)0.3 (11)4.6 (11)5.6 (13)N/A IM Mixed-Asset Target 2010 (MF) Median 1.6 1.6 -1.2 3.5 4.5 3.7 Vanguard Target Retirement 2015 (VTXVX)1.9 (38)1.9 (38)-0.6 (23)5.3 (7)6.0 (9)5.3 (9) Vanguard Target 2015 Composite Index 1.9 (37)1.9 (37)-0.4 (20)5.5 (5)6.1 (5)5.3 (7) IM Mixed-Asset Target 2015 (MF) Median 1.7 1.7 -1.4 3.7 4.6 4.1 Vanguard Target Retirement 2020 (VTWNX)1.7 (43)1.7 (43)-1.1 (28)6.0 (4)6.5 (6)N/A Vanguard Target 2020 Composite Index 1.7 (43)1.7 (43)-0.9 (21)6.2 (3)6.7 (3)N/A IM Mixed-Asset Target 2020 (MF) Median 1.6 1.6 -2.1 3.9 4.7 3.9 Vanguard Target Retirement 2025 (VTTVX)1.5 (44)1.5 (44)-1.5 (32)6.3 (8)6.7 (11)5.4 (11) Vanguard Target 2025 Composite Index 1.5 (45)1.5 (45)-1.3 (23)6.6 (6)7.0 (7)5.5 (6) IM Mixed-Asset Target 2025 (MF) Median 1.4 1.4 -2.3 4.9 5.4 4.3 Vanguard Target Retirement 2030 (VTHRX)1.3 (41)1.3 (41)-2.0 (25)6.7 (10)6.9 (10)N/A Vanguard Target 2030 Composite Index 1.3 (41)1.3 (41)-1.7 (19)6.9 (7)7.2 (6)N/A IM Mixed-Asset Target 2030 (MF) Median 1.1 1.1 -3.0 5.1 5.4 3.9 Vanguard Target Retirement 2035 (VTTHX)1.1 (36)1.1 (36)-2.5 (25)7.0 (10)7.1 (15)5.4 (16) Vanguard Target 2035 Composite Index 1.1 (33)1.1 (33)-2.2 (19)7.3 (6)7.4 (8)5.5 (10) IM Mixed-Asset Target 2035 (MF) Median 0.7 0.7 -3.3 5.7 6.0 4.2 Vanguard Target Retirement 2040 (VFORX)0.8 (37)0.8 (37)-3.1 (27)7.1 (10)7.3 (9)N/A Vanguard Target 2040 Composite Index 0.9 (36)0.9 (36)-2.7 (19)7.4 (5)7.6 (6)N/A IM Mixed-Asset Target 2040 (MF) Median 0.6 0.6 -3.9 5.7 5.8 4.0 _________________________ Returns are expressed as percentages. Returns for periods greater than one year are annualized. Peer group percentile ranks are shown in parenthesis. 6 Performance Summary Investment Options As of March 31, 2016 Quarter Year To Date 1 Year 3 Years 5 Years 10 Years Equity/Fixed Income Blend Options (cont.) Vanguard Target Retirement 2045 (VTIVX)0.8 (36)0.8 (36)-3.1 (30)7.1 (13)7.3 (16)5.5 (28) Vanguard Target 2045 Composite Index 0.8 (34)0.8 (34)-2.7 (19)7.4 (7)7.6 (8)5.6 (21) IM Mixed-Asset Target 2045 (MF) Median 0.5 0.5 -3.9 6.0 6.3 4.8 Vanguard Target Retirement 2050 (VFIFX)0.8 (38)0.8 (38)-3.1 (26)7.1 (12)7.3 (14)N/A Vanguard Target 2050 Composite Index 0.8 (34)0.8 (34)-2.7 (18)7.4 (8)7.6 (7)N/A IM Mixed-Asset Target 2050 (MF) Median 0.5 0.5 -4.2 6.0 6.1 4.1 Vanguard Target Retirement 2055 (VFFVX)0.8 (34)0.8 (34)-3.3 (31)7.0 (20)7.3 (22)N/A Vanguard Target 2055 Composite Index 0.8 (31)0.8 (31)-2.7 (20)7.4 (10)7.6 (14)N/A IM Mixed-Asset Target 2055+ (MF) Median 0.3 0.3 -3.9 6.3 6.4 N/A Vanguard Target Retirement 2060 (VTTSX)0.8 (34)0.8 (34)-3.2 (31)7.1 (19)N/A N/A Vanguard Target 2060 Composite Index 0.8 (31)0.8 (31)-2.7 (20)7.4 (10)N/A N/A IM Mixed-Asset Target 2055+ (MF) Median 0.3 0.3 -3.9 6.3 6.4 N/A Money Market Option Vanguard Prime Money Market (VMMXX)0.1 0.1 0.1 0.1 0.0 1.2 BofA Merrill Lynch 3 Month U.S. T-Bill 0.1 0.1 0.1 0.1 0.1 1.1 _________________________ Returns are expressed as percentages. Returns for periods greater than one year are annualized. Peer group percentile ranks are shown in parenthesis. 7 Pe rformance Summary Manager Compliance Checklist As of March 31, 2016 Ma na gers Vanguard S&P 500 Inde x (V FINX) Va nguard US Grow th (VWUSX) Vanguard Windsor II (V WNFX) Vangua rd Mid-Ca p Index (V IMSX) Va nguard Small-Ca p Inde x (NAES X) Vangua rd Interna tiona l Grow th (V WIGX) Vangua rd Total Bond Marke t Inde x (VBMFX) Va nguard Re ti re ment Trust Organi zati onal /Produ ct Is sues No ma teria l c hanges to investment team ++-+++++ No ma teria l o rg aniza tional changes ++++++++ Accounting or regulatory concerns ++++++++ Cu rrently in adherence to guidelin es ++++++++ Po rt fo lio characteris tics me et stylis tic expectations ++++++++ Re lati ve Perfor mance 1 Three-year return better than benchmark N/A --N/A N/A +N/A N/A Three-year rankin g better than peer group median +++++++N/A Fiv e year re turn better than benchmark N/A --N/A N/A +N/A N/AFive year re turn better than benchmark N/A --N/A N/A +N/A N/A Fiv e year ra nkin g better than peer group median ++++++-N/A Perfor manc e s tatus ++++++++ Summar y s tatus ++++++++ 1 Manager performance is evaluated net of investment management fees. 8 Pe rformance Summary Manager Compliance Checklist (Continued) As of March 31, 2016 Manage rs Vanguard Ba lance d Index (V BI NX ) Vanguard Target Re ti re ment Income Fund (VTINX) Vangua rd Target Re tirement 2010 (VTENX) Vanguard Ta rget Re tire ment 2015 (V TXVX) Vanguard Ta rge t Re ti re ment 2020 (V TWNX) Vangua rd Ta rge t Re ti re ment 2025 (V TTVX) Vanguard Targe t Re ti rement 2030 (V THRX) Vangua rd Targe t Re tire ment 2035 (VTTHX) Organizati onal /Produ ct Is sues No ma terial c hanges to investment team ++++++++ No ma terial o rganiza tional changes ++++++++ Accounting or regulatory concerns ++++++++ Cu rrently in adherence to guidelin es ++++++++ Po rt fo lio characteris tics me et stylis tic expectations ++++++++ Relative Perfor mance 1 Three-year return better than benchmark N/A N/A N/A N/A N/A N/A N/A N/A Three-year rankin g better than peer group median ++++++++ Five year return better than benchmark N/A N/A N/A N/A N/A N/A N/A N/AFive year return better than benchmark N/A N/A N/A N/A N/A N/A N/A N/A Five year rankin g better than peer group median ++++++++ Performance status ++++++++ Summar y s tatus ++++++++ 1 Manager performance is evaluated net of investment management fees. 9 Pe rformance Summary Manager Compliance Checklist (Continued) As of March 31, 2016 Mana gers Vanguard Ta rge t Re ti re ment 2040 (V FORX) Vangua rd Ta rget Re ti re ment 2045 (V TIVX) Va ngua rd Targe t Re ti re ment 2050 (V FIFX) Vangua rd Targe t Re ti re ment 2055 (V FFVX) Vangua rd Ta rget Re ti re ment 2060 (V TTSX) Vangua rd Prime Mone y Marke t Fund (V MMXX) Organizational /Produ ct Is sues No ma teria l c hanges to investment team ++++++ No ma teria l o rg aniza tional changes ++++++ Accounting or regulatory concerns ++++++ Cu rre ntly in adherence to guidelin es ++++++ Po rt fo lio characteris tics me et stylis tic expectations ++++++ Re lati ve Performanc e 1 Thre e-year re turn better than benchmark N/A N/A N/A N/A N/A N/A Thre e-year ra nkin g better than peer group median +++++N/A Fiv e year return better than benchmark N/A N/A N/A N/A N/A N/A 1 Manager performance is evaluated net of investment management fees. Fiv e year return better than benchmark N/A N/A N/A N/A N/A N/A Fiv e year rankin g better than peer group median ++++N/A N/A Performance status ++++++ Summary status ++++++ 10 Manager Compliance Checklist First Quarter 2016 Manager Compliance Issue Explanation Recommended Ac tion Comments Vanguard Windsor II Investment Team Changes Jim Barrow stepped down as PM of Windsor II at the end of 2015. He had managed Barrow Hanley’s portion of Windsor II assets (approximately 60%) since 1985. As had already been well- communicated over the past couple of years, his replacements are David Ganucheau and Jeff Fahrenbruch. Hold Messrs. Ganucheau and Fahrenbruch have 19 and 18 years of investment experience, respectively, and have managed money for Barrow Hanley since July 2011. However, investors are losing a great deal of experience with this change. W e recommend holding on the to the Fund but will continue to observe performance and flows. 11 Plan Assets 12 Plan Summary Defined Contribution Plan Assets As of March 31, 2016 Inve st ment Options Investment S tyle Al loca ti on Perce ntage Dome stic Equ ity Funds Vangu ard 500 Index Inv US Large Cap Equity - Core $ 162,165 4.2%$ 11,518 + 7.6% Vangu ard Winds or II Inv US Large Cap Equity - Value $ 62,006 1.6%$ 6,274 + 11.3% Vangu ard US G rowth Inv US Large Cap Equity - Growth $ 85,038 2.2%$ 1,395 + 1.7% Vangu ard M id Cap Index Inv US Mid Cap Eq uity -Core $ 138,441 3.6%$ 13,174 + 10.5% Vangu ard Small Cap Index Inv US Sm all Cap Equity - Core $ 149,265 3.9%$ 5,791 + 4.0% $ 596,915 15.5%$ 38,152 + 6.8% International Equ ity Funds Vangu ard Int ernat ional G row th Int ernat ional Equity $ 79,493 2.1%$ 4,976 + 6.7% $ 79,493 2.1%$ 4,976 + 6.7% Fixe d I ncome/Alternative Funds Vangu ard Total Bond M arket Index Inv Market Duration $ 53,284 1.4%$ 4,809 + 9.9% Vangu ard Ret ir ement Savings Trus t Short Duration $ 83,775 2.2%$ 3,446 + 4.3% Vangu ard Balanced Index Inv Balanced $ 82,496 2.1%$ 8,196 + 11.0% $ Change From Previous Qtr % C hange From Previous Qtr Vangu ard Balanced Index Inv Balanced $ 82,496 2.1%$ 8,196 + 11.0% $ 219,554 5.7%$ 16,452 + 8.1% Cash Vangu ard Prime M oney Market Cash $ 175,847 4.6%$ 32,581 + 22.7% $ 175,847 4.6%$ 32,581 + 22.7% Ta rge t Date Fu nds Vangu ard Target Ret ir ement Income Inv Blend $ 32,903 0.9%$ 4,066 + 14.1% Vangu ard Target Ret ir ement 2010 Inv Blend $ 1,671 0.0%$ 180 + 12.1% Vangu ard Target Ret ir ement 2015 Inv Blend $ 4,143 0.1%$ 299 + 7.8% Vangu ard Target Ret ir ement 2020 Inv Blend $ 56,782 1.5%$ (23,745)- 29.5% Vangu ard Target Ret ir ement 2025 Inv Blend $ 269,967 7.0%$ 24,239 + 9.9% Vangu ard Target Ret ir ement 2030 Inv Blend $ 144,205 3.7%$ 14,805 + 11.4% Vangu ard Target Ret ir ement 2035 Inv Blend $ 374,591 9.7%$ 42,269 + 12.7% Vangu ard Target Ret ir ement 2040 Inv Blend $ 424,305 11.0%$ 37,370 + 9.7% Vangu ard Target Ret ir ement 2045 Inv Blend $ 782,857 20.3%$ 74,183 + 10.5% Vangu ard Target Ret ir ement 2050 Inv Blend $ 430,381 11.2%$ 46,809 + 12.2% Vangu ard Target Ret ir ement 2055 Inv Blend $ 221,476 5.7%$ 31,358 + 16.5% Vangu ard Target Ret ir ement 2060 Inv Blend $ 43,457 1.1%$ 11,001 -- 2,786,737$ 72.2%262,835$ + 10.4% TO TA L $ 3,858,546 100.0%$ 354,996 + 10.1% 13 Plan Summary Fee Comparison Summary As of March 31, 2016 Inv estment Opt ion Expe nse Ratio Morningstar Categor y Av erage Fe e Level Comp ar ison Group M edian eVestment Al liance Univ erse Median Cate gor y Fe e Level Comp arison Group eVestment Alliance Univ erse Va nguard 500 In dex 0.16 1.03 0.92 0.15 La rg e Ble nd La rg e Cap No Lo ad US Pa ssive La rg e Cap Equity Va nguard US Gro wt h 0.47 1.17 0.92 0.83 La rg e Gro wt h La rg e Cap No Lo ad US Large Cap Gr owth Va nguard Windsor 0.34 1.11 0.92 0.82 La rg e Value La rg e Cap No Lo ad US Large Cap Va lu e Va nguard Mid-Ca p Index 0.20 1.17 1.07 0.24 Mid Ble nd Mid Cap No Lo ad US Pa ssive Mid Cap Equity Va nguard Sma ll-Ca p Index 0.20 1.22 1.16 0.24 Small Blend Small Cap No Load US Pas sive Sma ll Ca p Equity Va nguard International Gr owth 0.47 1.34 1.05 1.09 Fo re ig n Large Gro wt h Foreign Large Cap No Lo ad ACWI ex-US Gro wt h Equity Va nguard Total Bo nd Marke t Index 0.16 0.83 0.67 0.50 In terme diate-Term B ond In terme diate-Term B ond No Load US Co re Fixe d Income Va nguard Retire me nt Saving Trust 0.53 N/A N/A 0.82 N/A N/A US Stable Value Fixed In come Va nguard Balanced Index 0.23 0.92 0.9 0.77 Moderate Allo cation Moderate Allo cation No Load US Ba la nced Va nguard Target Retirement Income 0.14 0.48 0.64 0.46 Re tire me nt Income Re tire me nt Income No Load Life cycle/Target Date Income Va nguard Target Retirement 2010 0.14 0.41 0.59 0.55 Target Date 2000-2010 Target Retire me nt 2000-2010 No Lo ad Life cycle/Target Date 2010 Va nguard Target Retirement 2015 0.14 0.39 0.78 0.61 Target Date 2011-2015 Target Retire me nt 2011-2015 No Lo ad Life cycle/Target Date 2015 Va nguard Target Retirement 2020 0.14 0.46 0.73 0.62 Target Date 2016-2020 Target Retire me nt 2016-2020 No Lo ad Life cycle/Target Date 2020Vanguard Target Retirement 2020 0.14 0.46 0.73 0.62 Target Date 2016-2020 Target Retire me nt 2016-2020 No Lo ad Life cycle/Target Date 2020 Va nguard Target Retirement 2025 0.15 0.42 0.83 0.64 Target Date 2021-2025 Target Retire me nt 2021-2025 No Lo ad Life cycle/Target Date 2025 Va nguard Target Retirement 2030 0.15 0.46 0.76 0.65 Target Date 2026-2030 Target Retire me nt 2026-2030 No Lo ad Life cycle/Target Date 2030 Va nguard Target Retirement 2035 0.15 0.42 0.87 0.65 Target Date 2031-2035 Target Retire me nt 3031-2035 No Lo ad Life cycle/Target Date 2035 Va nguard Target Retirement 2040 0.16 0.46 0.78 0.67 Target Date 2036-2040 Target Retire me nt 2036-2040 No Lo ad Life cycle/Target Date 2040 Va nguard Target Retirement 2045 0.16 0.42 0.9 0.67 Target Date 2041-2045 Target Retire me nt 2041-2045 No Lo ad Life cycle/Target Date 2045 Va nguard Target Retirement 2050 0.16 0.44 0.79 0.67 Target Date 2046-2050 Target Retire me nt 2046-2050 No Lo ad Life cycle/Target Date 2050 Va nguard Target Retirement 2055 0.16 0.40 0.82 0.46 Target Date 2051+Target Retire me nt 2051+ No Lo ad Life cycle/Target Date 2055 Va nguard Target Retirement 2060 0.16 0.40 0.82 N/A Target Date 2051+Target Retire me nt 2051+ No Lo ad N/A Va nguard Prime Money Marke t 0.16 0.15 N/A 0.19 Money Market Taxable N/A US Cash Management Pavilio n Consulting Fee ($1,891 p er y ear) 14 Manager Evaluation 15 Historical Performance Three Year Rolling Percentile Ranking Relative Performance Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard 500 Index Fund (VFINX)1.3 1.3 1.6 11.7 11.4 6.9 1.2 13.5 32.2 15.8 2.0 14.9 26.5 -37.0 5.4 15.6 S&P 500 1.3 1.3 1.8 11.8 11.6 7.0 1.4 13.7 32.4 16.0 2.1 15.1 26.5 -37.0 5.5 15.8 IM U.S. Large Cap Equity -0.4 -0.4 -1.8 10.1 9.8 6.1 0.0 10.9 32.6 15.3 -1.4 13.4 28.0 -37.8 6.8 13.1 Vanguard 500 Index Fund (VFINX) Rank 20 20 15 25 17 28 42 16 56 43 20 34 58 41 59 31 Vanguard 500 Index Fund (VFINX)S&P 500 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Cumulative Annualized Over/Under Relative Performance Over/Under Performance 0.0 0.2 -0.2 -0.4Return (%)6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard 500 Index Fund (VFINX)11.4 12.4 11.7 -0.1 1.0 0.9 0.0 -11.7 7.0 0.0 39y 7m S&P 500 11.6 12.4 11.8 0.0 1.0 1.0 0.0 -0.5 6.9 0.0 39y 7m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 12.4 -1.0 0.0 20.0 39y 7m Manager Evaluation Vanguard 500 Index Fund (VFINX) vs. S&P 500 As of March 31, 2016 16 Portfolio Characteristics Portfolio Benchmark Wtd. Avg. Mkt. Cap ($M)137,955 137,949 Median Mkt. Cap ($M)18,411 18,411 Price/Earnings ratio 19.3 19.3 Price/Book ratio 3.2 3.2 5 Yr. EPS Growth Rate (%)7.7 7.2 Current Yield (%)2.2 2.2 Debt to Equity 0.9 0.9 Number of Stocks 506 504 Beta (5 Years, Monthly)1.00 1.00 Consistency (5 Years, Monthly)1.67 1.00 Sharpe Ratio (5 Years, Monthly)0.95 0.96 Information Ratio (5 Years, Monthly)-10.26 - Up Market Capture (5 Years, Monthly)99.58 - Down Market Capture (5 Years, Monthly)100.45 - Top Ten Equity Holdings Portfolio Weight (%) Benchmark Weight (%) Active Weight (%) Quarterly Return (%) Apple Inc 3.4 3.4 0.0 4.1 Microsoft Corp 2.4 2.4 0.0 0.3 Exxon Mobil Corp 1.9 1.9 0.0 8.2 Johnson & Johnson 1.7 1.7 0.0 6.1 General Electric Co 1.7 1.7 0.0 2.9 Facebook Inc 1.5 1.5 0.0 9.0 Berkshire Hathaway Inc 1.4 1.5 -0.1 7.5 AT&T Inc 1.3 1.3 0.0 15.4 Amazon.com Inc 1.3 1.3 0.0 -12.2 Wells Fargo & Co 1.2 1.2 0.0 -10.3 % of Portfolio 17.7 17.8 Distribution of Market Capitalization (%) Vanguard 500 Index Fund (VFINX)S&P 500 0.0 15.0 30.0 45.0 60.0 >$75 Bil $20 Bil - $75 Bil $5 Bil - $20 Bil $0 - $5 Bil 50.5 33.2 15.9 0.5 50.5 33.2 15.9 0.5 Sector Weights (%) Vanguard 500 Index Fund (VFINX)S&P 500 0.0 5.0 10.0 15.0 20.0 25.0 Utilities Telecommunication Services Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 3.4 2.8 2.8 20.8 10.1 14.3 15.6 6.8 10.4 12.9 3.4 2.8 2.8 20.8 10.1 14.3 15.6 6.8 10.4 12.9 Manager Evaluation Vanguard 500 Index Fund (VFINX) vs. S&P 500 As of March 31, 2016 17 Historical Performance Buy and Hold Attribution Risk and Return (Apr - 2011 - Mar - 2016)Three Year Rolling Percentile Ranking Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Windsor II (VWNFX)0.2 0.2 -2.9 8.5 9.7 5.8 -3.2 11.2 30.7 16.7 2.7 10.6 27.1 -36.7 2.2 18.2 Russell 1000 Value Index 1.6 1.6 -1.5 9.4 10.2 5.7 -3.8 13.5 32.5 17.5 0.4 15.5 19.7 -36.8 -0.2 22.2 IM U.S. Large Cap Value Equity 0.2 0.2 -3.6 8.3 8.6 5.0 -3.8 10.9 32.7 15.3 -2.3 12.6 24.1 -36.8 1.7 17.9 Vanguard Windsor II (VWNFX) Rank 49 49 41 46 31 30 36 43 77 29 15 84 28 50 46 46 Vanguard Windsor II (VWNFX)Russell 1000 Value Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 9.0 9.6 10.2 10.8 11.4 Return (%)12.3 12.6 12.9 13.2 13.5 13.8 14.1 Risk (Standard Deviation %) Russell 1000 Value Index Vanguard Windsor II (VWNFX) Average Active Weight 0.0 8.0 16.0-8.0-16.0 Utilities Telecommunication Services Other Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary -3.7 0.2 0.3 -0.8 2.5 0.3 5.7 -7.9 -3.7 2.1 5.0 Allocation (Total: -0.1) 0.0 0.6 1.2-0.6-1.2 -0.5 0.0 0.0 -0.1 0.0 0.0 -0.2 0.5 -0.1 0.1 0.1 Stock (Total: -1.7) 0.0 0.9 1.8-0.9-1.8-2.7 0.0 0.1 0.0 0.1 0.1 -0.1 -0.1 -1.3 -0.7 0.4 -0.1 Vanguard Windsor II (VWNFX) 0.0 0.5 1.0-0.5-1.0-1.5 -0.5 0.1 0.0 0.0 0.2 -0.1 -0.3 -0.7 -0.8 0.4 0.0 Manager Evaluation Vanguard Windsor II (VWNFX) vs. Russell 1000 Value Index As of March 31, 2016 Differences between the manager return and the attribution return are due primarily to the effects of fees and portfolio trading. 18 Portfolio Characteristics Portfolio Benchmark Wtd. Avg. Mkt. Cap ($M)112,364 110,516 Median Mkt. Cap ($M)19,224 7,119 Price/Earnings ratio 15.8 17.3 Price/Book ratio 2.6 2.1 5 Yr. EPS Growth Rate (%)6.2 2.6 Current Yield (%)2.7 2.6 Debt to Equity 1.4 1.0 Number of Stocks 279 684 Beta (5 Years, Monthly)0.97 1.00 Consistency (5 Years, Monthly)45.00 1.00 Sharpe Ratio (5 Years, Monthly)0.81 0.84 Information Ratio (5 Years, Monthly)-0.31 - Up Market Capture (5 Years, Monthly)96.91 - Down Market Capture (5 Years, Monthly)98.85 - Top Ten Equity Holdings Portfolio Weight (%) Benchmark Weight (%) Active Weight (%) Quarterly Return (%) Microsoft Corp 3.3 2.0 1.3 0.3 Medtronic PLC 3.1 1.1 2.0 -2.0 JPMorgan Chase & Co 2.8 2.2 0.6 -9.7 Philip Morris International Inc 2.7 0.8 2.0 12.8 Pfizer Inc 2.7 1.9 0.9 -7.2 Wells Fargo & Co 2.6 2.3 0.3 -10.3 Johnson & Johnson 2.3 2.7 -0.4 6.1 Bank of America Corp 2.3 1.4 0.8 -19.4 Raytheon Co.2.2 0.4 1.8 -1.0 Honeywell International Inc 2.2 0.0 2.2 8.8 % of Portfolio 26.1 14.7 Distribution of Market Capitalization (%) Vanguard Windsor II (VWNFX)Russell 1000 Value Index 0.0 15.0 30.0 45.0 60.0 >$75 Bil $20 Bil - $75 Bil $5 Bil - $20 Bil $0 - $5 Bil 42.0 31.0 21.2 5.8 49.7 33.7 13.0 3.6 Sector Weights (%) Vanguard Windsor II (VWNFX)Russell 1000 Value Index 0.0 8.0 16.0 24.0 32.0 40.0 Other Utilities Telecommunication Services Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 0.3 3.0 3.2 2.1 14.2 11.2 17.8 19.7 9.1 8.8 10.6 0.0 7.0 2.9 2.8 11.6 10.4 11.7 28.2 12.7 7.4 5.3 Manager Evaluation Vanguard Windsor II (VWNFX) vs. Russell 1000 Value Index As of March 31, 2016 19 Historical Performance Buy and Hold Attribution Risk and Return (Apr - 2011 - Mar - 2016)Three Year Rolling Percentile Ranking Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard US Growth (VWUSX)-3.5 -3.5 0.2 13.5 12.2 6.9 8.5 13.1 35.5 18.4 -0.7 11.5 35.0 -37.8 10.1 1.8 Russell 1000 Growth Index 0.7 0.7 2.5 13.6 12.4 8.3 5.7 13.1 33.5 15.3 2.6 16.7 37.2 -38.4 11.8 9.1 IM U.S. Large Cap Growth Equity -2.7 -2.7 -1.2 11.8 10.5 6.9 5.5 10.5 34.1 14.9 -1.8 15.1 35.0 -39.8 13.8 6.7 Vanguard US Growth (VWUSX) Rank 61 61 35 22 16 51 20 22 36 19 37 80 51 30 77 85 Vanguard US Growth (VWUSX)Russell 1000 Growth Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 12.0 12.2 12.4 12.6 Return (%)11.2 11.9 12.6 13.3 14.0 14.7 15.4 16.1 Risk (Standard Deviation %) Russell 1000 Growth Index Vanguard US Growth (VWUSX) Average Active Weight 0.0 10.0 20.0-10.0-20.0 Utilities Telecommunication Services Other Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 0.0 -1.7 0.0 -2.1 8.6 -4.8 2.0 3.8 -0.2 -5.4 -0.2 Allocation (Total: -0.9) 0.0 0.2-0.2-0.4-0.6 0.0 -0.3 0.0 0.0 0.1 -0.2 -0.2 0.0 0.0 -0.3 0.0 Stock (Total: -2.8) 0.0 0.6-0.6-1.2-1.8 0.0 -0.1 0.0 0.1 -0.8 0.0 -0.9 0.0 0.0 -0.4 -0.7 Vanguard US Growth (VWUSX) 0.0 0.5 1.0-0.5-1.0-1.5-2.0 0.0 -0.3 0.0 0.1 -0.7 -0.2 -1.1 0.0 0.0 -0.7 -0.7 Manager Evaluation Vanguard US Growth (VWUSX) vs. Russell 1000 Growth Index As of March 31, 2016 Differences between the manager return and the attribution return are due primarily to the effects of fees and portfolio trading. 20 Portfolio Characteristics Portfolio Benchmark Wtd. Avg. Mkt. Cap ($M)119,096 136,286 Median Mkt. Cap ($M)23,235 8,715 Price/Earnings ratio 26.2 21.6 Price/Book ratio 4.6 5.3 5 Yr. EPS Growth Rate (%)15.0 12.4 Current Yield (%)1.0 1.6 Debt to Equity 0.3 -0.2 Number of Stocks 155 635 Beta (5 Years, Monthly)1.09 1.00 Consistency (5 Years, Monthly)55.00 1.00 Sharpe Ratio (5 Years, Monthly)0.90 1.00 Information Ratio (5 Years, Monthly)0.02 - Up Market Capture (5 Years, Monthly)106.38 - Down Market Capture (5 Years, Monthly)112.79 - Top Ten Equity Holdings Portfolio Weight (%) Benchmark Weight (%) Active Weight (%) Quarterly Return (%) Google Inc (Class C)4.0 2.1 1.9 -1.8 Facebook Inc 3.4 2.3 1.1 9.0 Visa Inc 3.4 1.4 2.0 -1.2 MasterCard Inc 3.4 0.9 2.5 -2.7 Amazon.com Inc 3.0 2.2 0.8 -12.2 Apple Inc 2.9 6.0 -3.0 4.1 Allergan PLC 2.6 0.5 2.2 -14.2 Alphabet Inc 2.4 2.1 0.3 -1.9 Celgene Corp 2.2 0.8 1.4 -16.4 Home Depot Inc. (The)2.1 1.6 0.4 1.4 % of Portfolio 29.2 19.8 Distribution of Market Capitalization (%) Vanguard US Growth (VWUSX)Russell 1000 Growth Index 0.0 15.0 30.0 45.0 60.0 >$75 Bil $20 Bil - $75 Bil $5 Bil - $20 Bil $0 - $5 Bil 47.9 29.3 19.3 3.5 44.4 30.9 22.2 2.4 Sector Weights (%) Vanguard US Growth (VWUSX)Russell 1000 Growth Index 0.0 10.0 20.0 30.0 40.0 50.0 Other Utilities Telecommunication Services Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 0.0 0.0 0.3 1.5 36.6 6.5 17.9 9.9 0.3 6.3 20.7 0.0 0.1 2.4 3.5 28.2 11.1 15.6 5.6 0.5 11.7 21.3 Manager Evaluation Vanguard US Growth (VWUSX) vs. Russell 1000 Growth Index As of March 31, 2016 21 Historical Performance Three Year Rolling Percentile Ranking Relative Performance Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Mid-Cap Index Fund (VIMSX)1.1 1.1 -4.4 10.6 9.9 7.1 -1.5 13.6 35.0 15.8 -2.1 25.5 40.2 -41.8 6.0 13.6 Vanguard Mid-Cap Index Fund Blended Benchmark 1.2 1.2 -4.3 10.8 10.1 7.3 -1.3 13.8 35.4 16.0 -1.9 25.7 40.5 -41.8 6.2 13.7 IM U.S. Mid Cap Equity 0.4 0.4 -6.6 8.7 8.1 6.1 -2.7 8.5 35.0 15.2 -4.0 23.6 36.0 -41.7 10.0 10.9 Vanguard Mid-Cap Index Fund (VIMSX) Rank 42 42 34 19 20 24 39 10 51 43 34 34 34 52 67 31 Vanguard Mid-Cap Index Fund (VIMSX) Vanguard Mid-Cap Index Fund Blended Benchmark 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Cumulative Annualized Over/Under Relative Performance Over/Under Performance 0.0 0.2 -0.2 -0.4Return (%)6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Mid-Cap Index Fund (VIMSX)9.9 14.7 10.6 -0.2 1.0 0.7 0.1 -3.2 9.5 0.0 17y 10m Vanguard Mid-Cap Index Fund Blended Benchmark 10.1 14.7 10.8 0.0 1.0 0.7 0.0 N/A 9.5 0.0 17y 10m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 14.7 -0.7 0.0 30.0 17y 10m Manager Evaluation Vanguard Mid-Cap Index Fund (VIMSX) vs. Vanguard Mid-Cap Index Fund Blended Benchmark As of March 31, 2016 Note: Prior to May 16, 2003, the Vanguard Mid-Cap Index was benchmarked to the S&P MidCap 400 Index. From May 16, 2003 to January 30, 2013, the Index fund was benchmarked to the MSCI US Mid Cap 450 Index. Starting on January 31, 2013, the benchmark transitioned to the CRSP US Mid Cap Index. 22 Portfolio Characteristics Portfolio Benchmark Wtd. Avg. Mkt. Cap ($M)11,921 11,922 Median Mkt. Cap ($M)9,278 9,507 Price/Earnings ratio 21.0 21.0 Price/Book ratio 2.9 2.9 5 Yr. EPS Growth Rate (%)10.5 10.5 Current Yield (%)1.6 1.6 Debt to Equity -2.8 -2.8 Number of Stocks 365 351 Beta (5 Years, Monthly)1.02 1.00 Consistency (5 Years, Monthly)26.67 1.00 Sharpe Ratio (5 Years, Monthly)0.74 0.79 Information Ratio (5 Years, Monthly)-0.69 - Up Market Capture (5 Years, Monthly)99.42 - Down Market Capture (5 Years, Monthly)102.00 - Top Ten Equity Holdings Portfolio Weight (%) Benchmark Weight (%) Active Weight (%) Quarterly Return (%) Ross Stores Inc 0.8 0.8 0.0 7.9 Fiserv Inc.0.7 0.7 0.0 12.2 Equinix Inc 0.7 0.7 0.0 10.0 Electronic Arts Inc.0.6 0.6 0.0 -3.8 ConAgra Foods Inc.0.6 0.6 0.0 6.5 Tyson Foods Inc.0.6 0.6 0.0 25.3 WEC Energy Group Inc 0.6 0.6 0.0 18.1 Hartford Financial Services Group Inc. (The)0.6 0.6 0.0 6.5 Edwards Lifesciences Corp 0.6 0.6 0.0 11.7 Eversource Energy 0.6 0.6 0.0 15.2 % of Portfolio 6.5 6.5 Distribution of Market Capitalization (%) Vanguard Mid-Cap Index Fund (VIMSX) CRSP U.S. Mid Cap TR Index 0.0 50.0 100.0 150.0 $20 Bil - $75 Bil $5 Bil - $20 Bil $0 - $5 Bil 7.1 90.2 2.77.1 90.2 2.7 Sector Weights (%) Vanguard Mid-Cap Index Fund (VIMSX) CRSP U.S. Mid Cap TR Index 0.0 5.0 10.0 15.0 20.0 25.0 Utilities Telecommunication Services Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 5.2 1.2 6.3 16.0 12.4 9.5 18.6 5.1 5.9 19.7 5.2 1.2 6.3 16.0 12.4 9.5 18.6 5.1 5.9 19.8 Manager Evaluation Vanguard Mid-Cap Index Fund (VIMSX) vs. CRSP U.S. Mid Cap TR Index As of March 31, 2016 23 Historical Performance Three Year Rolling Percentile Ranking Relative Performance Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Small-Cap Index Fund (NAESX)1.0 1.0 -7.2 8.4 8.6 6.7 -3.8 7.4 37.6 18.0 -2.8 27.7 36.1 -36.1 1.2 15.6 Vanguard Small-Cap Index Fund Blended Benchmark 1.0 1.0 -7.2 8.5 8.8 6.8 -3.7 7.5 37.8 18.2 -2.8 27.8 36.1 -36.2 1.2 15.8 IM U.S. Small Cap Equity -0.4 -0.4 -9.0 6.6 7.1 4.7 -4.9 3.6 38.5 14.5 -3.7 25.7 29.1 -38.3 -1.4 13.3 Vanguard Small-Cap Index Fund (NAESX) Rank 36 36 36 25 24 10 35 10 58 18 43 31 27 42 39 37 Vanguard Small-Cap Index Fund (NAESX) Vanguard Small-Cap Index Fund Blended Benchmark 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Cumulative Annualized Over/Under Relative Performance Over/Under Performance 0.0 0.2 0.4 -0.2 -0.4Return (%)6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Small-Cap Index Fund (NAESX)8.6 16.4 9.7 -0.1 1.0 0.6 0.0 -3.3 11.1 10.0 48y 2m Vanguard Small-Cap Index Fund Blended Benchmark 8.8 16.5 9.9 0.0 1.0 0.6 0.0 N/A 11.0 0.0 48y 2m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 16.5 -0.6 0.0 30.0 48y 2m Manager Evaluation Vanguard Small-Cap Index Fund (NAESX) vs. Vanguard Small-Cap Index Fund Blended Benchmark As of March 31, 2016 Note: Prior to May 16, 2003, the Vanguard Small-Cap Index was benchmarked to the Russell 2000 Index. From May 16, 2003 to January 30, 2013, the Index fund was benchmarked to the MSCI US Small Cap 1750 Index. Starting on January 31, 2013, the benchmark transitioned to the CRSP US Small Cap Index. 24 Portfolio Characteristics Portfolio Benchmark Wtd. Avg. Mkt. Cap ($M)3,395 3,394 Median Mkt. Cap ($M)1,694 1,703 Price/Earnings ratio 19.8 19.8 Price/Book ratio 2.4 2.4 5 Yr. EPS Growth Rate (%)10.6 10.6 Current Yield (%)1.7 1.7 Debt to Equity 1.1 1.1 Number of Stocks 1,495 1,470 Beta (5 Years, Monthly)1.01 1.00 Consistency (5 Years, Monthly)23.33 1.00 Sharpe Ratio (5 Years, Monthly)0.61 0.64 Information Ratio (5 Years, Monthly)-0.50 - Up Market Capture (5 Years, Monthly)99.99 - Down Market Capture (5 Years, Monthly)101.98 - Top Ten Equity Holdings Portfolio Weight (%) Benchmark Weight (%) Active Weight (%) Quarterly Return (%) AGL Resources Inc.0.3 0.3 0.0 2.9 Arthur J. Gallagher & Co.0.3 0.3 0.0 9.7 Duke Realty Corp 0.3 0.3 0.0 8.3 Mid-America Apartment Communities Inc.0.3 0.3 0.0 13.6 Ingredion Inc 0.3 0.3 0.0 11.9 Waste Connections Inc.0.3 0.3 0.0 14.9 Valspar Corp (The)0.3 0.3 0.0 29.5 Atmos Energy Corp 0.3 0.3 0.0 18.5 Cadence Design Systems Inc 0.3 0.3 0.0 13.3 Regency Centers Corp.0.3 0.3 0.0 10.7 % of Portfolio 2.8 2.8 Distribution of Market Capitalization (%) Vanguard Small-Cap Index (NAESX) CRSP U.S. Small Cap TR Index 0.0 25.0 50.0 75.0 100.0 $5 Bil - $20 Bil $0 - $5 Bil 19.7 80.3 19.8 80.2 Sector Weights (%) Vanguard Small-Cap Index (NAESX) CRSP U.S. Small Cap TR Index 0.0 6.0 12.0 18.0 24.0 30.0 Utilities Telecommunication Services Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 5.2 0.4 5.1 16.7 15.0 10.2 25.8 3.8 3.7 14.0 5.2 0.4 5.1 16.7 15.0 10.2 25.9 3.8 3.7 13.9 Manager Evaluation Vanguard Small-Cap Index (NAESX) vs. CRSP U.S. Small Cap TR Index As of March 31, 2016 25 Historical Performance Buy and Hold Attribution Risk and Return (Apr - 2011 - Mar - 2016)Three Year Rolling Percentile Ranking Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Int. Growth (VWIGX)-2.0 -2.0 -7.7 3.1 2.5 3.4 -0.7 -5.6 22.9 20.0 -13.7 15.7 41.6 -44.9 16.0 26.0 MSCI AC World ex USA (Net)-0.4 -0.4 -9.2 0.3 0.3 1.9 -5.7 -3.9 15.3 16.8 -13.7 11.2 41.4 -45.5 16.7 26.7 IM International Equity -0.7 -0.7 -8.7 1.3 1.2 2.1 -2.8 -4.5 17.4 18.6 -14.9 12.9 36.5 -46.0 13.2 26.2 Vanguard Int. Growth (VWIGX) Rank 63 63 41 28 31 28 37 62 23 36 39 36 39 44 39 52 Vanguard Int. Growth (VWIGX)MSCI AC World ex USA (Net) 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 -4.0 -2.0 0.0 2.0 4.0 6.0 Return (%)12.8 13.6 14.4 15.2 16.0 16.8 17.6 18.4 Risk (Standard Deviation %) MSCI AC World ex USA (Net) Vanguard Int. Growth (VWIGX) Average Active Weight 0.0 10.0 20.0-10.0-20.0 Utilities Telecommunication Services Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary -3.5 -1.9 -1.5 9.9 -0.1 -0.1 -5.0 -3.8 -4.6 10.6 Allocation (Total: -0.7) 0.0 0.4 0.8-0.4-0.8 -0.1 -0.1 -0.1 0.1 0.0 0.0 0.2 -0.3 -0.2 -0.2 Stock (Total: -0.9) 0.0 0.8 1.6-0.8-1.6 0.0 -0.4 -0.2 0.1 -0.2 0.8 -0.4 0.0 0.2 -0.7 Vanguard Int. Growth (VWIGX) 0.0 0.7 1.4 2.1-0.7-1.4-2.1 -0.1 -0.4 -0.3 0.2 -0.2 0.8 -0.2 -0.3 0.0 -1.0 Manager Evaluation Vanguard International Growth (VWIGX) vs. MSCI AC World ex USA (Net) As of March 31, 2016 Differences between the manager return and the attribution return are due primarily to the effects of fees and portfolio trading. 26 Total Attribution 0.0 0.2 0.4 0.6 0.8 1.0-0.2-0.4-0.6-0.8-1.0-1.2-1.4 Pacific Other North America Middle East Europe ex EMU EMU EM Latin America EM Europe + Middle East + Africa EM Asia -0.1 0.0 -0.8 0.1 0.3 -0.8 -0.1 -0.3 0.0 Performance Attribution Average Active Weight 0.0 5.0 10.0-5.0-10.0-15.0 Pacific Other North America Middle East Europe ex EMU EMU EM Latin America EM Europe + Middle East + Africa EM Asia -8.3 0.3 2.7 0.3 2.3 2.5 -1.4 -2.1 3.7 Allocation (Total: 0.0) 0.0 0.3 0.6-0.3-0.6 0.3 0.0 0.3 0.0 -0.1 0.0 -0.3 -0.3 0.1 Stock (Total: -1.5) 0.0 0.6 1.2-0.6-1.2-1.8 -0.3 0.0 -1.1 0.2 0.4 -0.7 0.2 0.0 -0.1 Manager Evaluation Vanguard International Growth (VWIGX) vs. MSCI AC World ex USA (Net) 1 Quarter Ending March 31, 2016 27 Portfolio Characteristics Portfolio Benchmark Wtd. Avg. Mkt. Cap ($M)60,802 49,504 Median Mkt. Cap ($M)20,231 6,912 Price/Earnings ratio 21.0 14.6 Price/Book ratio 3.2 2.2 5 Yr. EPS Growth Rate (%)9.5 6.5 Current Yield (%)1.9 3.3 Debt to Equity 1.0 1.2 Number of Stocks 158 1,856 Beta (5 Years, Monthly)1.07 1.00 Consistency (5 Years, Monthly)51.67 1.00 Sharpe Ratio (5 Years, Monthly)0.23 0.09 Information Ratio (5 Years, Monthly)0.67 - Up Market Capture (5 Years, Monthly)109.43 - Down Market Capture (5 Years, Monthly)98.10 - Top Ten Equity Holdings Portfolio Weight (%) Benchmark Weight (%) Active Weight (%) Quarterly Return (%) Tencent Holdings LTD 4.0 0.6 3.4 3.8 AIA Group Ltd 3.5 0.4 3.1 -5.8 Baidu Inc 3.3 0.2 3.2 1.0 Industria De Diseno Textil Inditex SA 2.9 0.2 2.7 -2.1 Alibaba Group Holding Ltd 2.8 0.2 2.5 -2.8 Amazon.com Inc 2.6 0.0 2.6 -12.2 Rolls Royce Holdings PLC 1.8 0.1 1.7 15.7 Softbank Group Corp 1.8 0.3 1.5 -6.1 Arm Holdings PLC 1.6 0.1 1.5 -4.8 Atlas Copco AB 1.6 0.1 1.5 1.9 % of Portfolio 26.0 2.3 Distribution of Market Capitalization (%) Vanguard International Growth (VWIGX) MSCI AC World ex USA (Net) 0.0 15.0 30.0 45.0 60.0 >$75 Bil $20 Bil - $75 Bil $5 Bil - $20 Bil $0 - $5 Bil 21.3 37.7 32.7 8.3 24.4 39.5 31.0 5.1 Sector Weights (%) Vanguard International Growth (VWIGX) MSCI AC World ex USA (Net) 0.0 6.0 12.0 18.0 24.0 30.0 Other Utilities Telecommunication Services Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 0.2 0.0 3.0 5.3 19.2 11.4 10.0 19.9 2.3 7.4 21.2 0.0 3.6 5.3 6.9 8.4 11.5 8.8 25.7 6.4 11.2 12.0 Manager Evaluation Vanguard International Growth (VWIGX) vs. MSCI AC World ex USA (Net) As of March 31, 2016 28 Vanguard International Growth (VWIGX) MSCI AC World ex USA (Net) Australia 0.8 5.1 Hong Kong 4.5 2.3 Japan 11.1 16.1 New Zealand 0.0 0.1 Singapore 0.2 1.0 Pacific 16.6 24.6 Austria 0.0 0.1 Belgium 0.0 1.0 Finland 0.4 0.7 France 5.2 7.1 Germany 7.7 6.5 Ireland 1.3 0.4 Italy 2.6 1.6 Netherlands 2.4 2.2 Portugal 0.3 0.1 Spain 4.6 2.3 EMU 24.4 22.1 Denmark 2.1 1.4 Norway 1.4 0.4 Sweden 5.4 2.1 Switzerland 5.7 6.5 United Kingdom 12.3 13.8 Europe ex EMU 27.0 24.3 Canada 1.9 6.6 United States 7.0 0.1 Israel 1.4 0.5 Middle East 1.4 0.5 Developed Markets 78.3 78.2 Vanguard International Growth (VWIGX) MSCI AC World ex USA (Net) Brazil 0.9 1.4 Cayman Islands 0.0 0.0 Chile 0.0 0.3 Colombia 0.0 0.1 Mexico 0.4 1.0 Peru 0.0 0.1 Virgin Islands 0.0 0.0 EM Latin America 1.2 2.9 China 12.2 5.2 India 2.0 1.8 Indonesia 0.3 0.6 Korea 2.4 3.4 Malaysia 0.0 0.8 Philippines 0.0 0.3 Taiwan 1.2 2.7 Thailand 0.6 0.5 EM Asia 18.7 15.2 Czech Republic 0.0 0.0 Egypt 0.0 0.0 Greece 0.0 0.1 Hungary 0.0 0.1 Poland 0.0 0.3 Qatar 0.0 0.2 Russia 0.5 0.8 South Africa 0.2 1.6 Turkey 0.8 0.3 United Arab Emirates 0.0 0.2 EM Europe + Middle East + Africa 1.4 3.7 Emerging Markets 21.3 21.8 Frontier Markets 0.0 0.0 Cash 0.0 0.0 Other 0.4 0.0 Total 100.0 100.0 Manager Evaluation Vanguard International Growth (VWIGX) vs. MSCI AC World ex USA (Net) As of March 31, 2016 29 Historical Performance Three Year Rolling Percentile Ranking Relative Performance Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Total Bond Market Index Fund (VBMFX)3.1 3.1 1.7 2.3 3.6 4.8 0.3 5.8 -2.3 4.0 7.6 6.4 5.9 5.1 6.9 4.3 Vanguard Total Bond Market Index Fund Benchmark 3.1 3.1 1.9 2.5 3.8 4.9 0.4 5.9 -2.0 4.3 7.9 6.6 5.9 5.2 7.0 4.3 IM U.S. Broad Market Core+ Fixed Income 2.6 2.6 0.3 2.0 3.9 5.2 -0.5 5.4 -1.1 8.2 6.2 8.2 14.2 -2.2 5.6 4.0 Vanguard Total Bond Market Index Fund (VBMFX) Rank 20 20 8 37 62 67 21 41 84 98 19 88 100 11 25 45 Vanguard Total Bond Market Index Fund (VBMFX) Vanguard Total Bond Market Index Fund Benchmark 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Cumulative Annualized Over/Under Relative Performance Over/Under Performance 0.0 0.3 0.6 -0.3 -0.6Return (%)6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Total Bond Market Index Fund (VBMFX)3.6 3.0 3.5 -0.3 1.0 1.2 0.1 -1.4 1.4 20.0 29y 3m Vanguard Total Bond Market Index Fund Benchmark 3.8 3.0 3.7 0.0 1.0 1.3 0.0 N/A 1.3 0.0 29y 3m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.0 0.0 N/A 3.0 -1.3 0.0 25.0 29y 3m Manager Evaluation Vanguard Total Bond Market Index Fund (VBMFX) vs. Vanguard Total Bond Market Index Fund Benchmark As of March 31, 2016 Note: Prior to January 1, 2010, the Vanguard Total Bond Market Index was benchmarked to the Barclays Aggregate Index. Starting on January 1, 2010, the benchmark was transitioned to the Barclays Aggregate Float Adjusted Index. 30 Portfolio Characteristics Portfolio Benchmark Effective Duration 5.7 5.7 Avg. Maturity 8.0 8.0 Avg. Quality AA+AA+ Yield To Maturity (%)2.1 2.1 Credit Quality Distribution (%) Vanguard Total Bond Market Index (VBMFX) Barclays U.S. Aggregate Float Adjusted 0.0 25.0 50.0 75.0 100.0 AAAAAABBB68.4 4.8 12.4 14.4 69.3 3.9 12.5 14.3 Maturity Distribution (%) Vanguard Total Bond Market Index (VBMFX) Barclays U.S. Aggregate Float Adjusted 0.0 15.0 30.0 45.0 60.0 < 1 Yr1 < 3 Yrs3 < 5 Yrs5 < 10 Yrs10 < 20 Yrs> 20 Yrs0.0 23.8 25.2 34.1 3.9 13.0 1.2 22.8 25.7 33.9 3.7 12.7 Sector Distribution (%) Vanguard Total Bond Market Index (VBMFX) Barclays U.S. Aggregate Float Adjusted 0.0 15.0 30.0 45.0 60.0 TreasuriesAgenciesCreditMBSABSNon-USEmergingOtherCMBS40.6 3.9 23.3 20.4 0.6 7.2 2.0 0.0 2.0 40.5 2.9 27.5 20.3 0.6 5.9 0.0 0.3 2.0 Manager Evaluation Vanguard Total Bond Market Index (VBMFX) vs. Barclays U.S. Aggregate Float Adjusted As of March 31, 2016 31 Historical Performance Three Year Rolling Percentile Ranking Relative Performance Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Retirement Savings Trust 0.5 0.5 1.9 1.8 2.1 2.9 1.9 1.8 1.7 2.4 2.9 2.9 3.0 4.3 4.5 4.3 Ryan 3 Yr GIC Master 0.3 0.3 1.2 1.1 1.4 2.8 1.2 1.0 1.1 1.5 2.4 3.5 4.5 4.8 4.5 3.8 IM U.S. Short Duration Fixed Income 0.7 0.7 0.4 0.6 1.1 2.4 0.3 0.6 0.2 2.3 1.2 3.1 5.9 -1.0 5.0 4.1 Vanguard Retirement Savings Trust Rank 67 67 2 1 7 29 1 6 4 49 9 55 77 22 61 34 Vanguard Retirement Savings Trust Ryan 3 Yr GIC Master 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Cumulative Annualized Over/Under Relative Performance Over/Under Performance 0.0 0.5 1.0 -0.5 -1.0Return (%)6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Retirement Savings Trust 2.1 0.2 2.0 0.8 0.9 9.2 0.1 9.7 0.0 100.0 13y 3m Ryan 3 Yr GIC Master 1.4 0.2 1.3 0.0 1.0 5.8 0.0 0.5 0.0 5.0 13y 3m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.0 0.0 N/A 0.2 -5.8 0.0 0.0 13y 3m Manager Evaluation Vanguard Retirement Savings Trust vs. Ryan 3 Yr GIC Master As of March 31, 2016 32 Historical Performance Three Year Rolling Percentile Ranking Relative Performance Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Balanced Index Fund (VBINX)1.9 1.9 0.6 7.6 8.1 6.4 0.4 9.8 17.9 11.3 4.1 13.1 20.1 -22.2 6.2 11.0 Vanguard Balanced Index Fund Benchmark 1.9 1.9 0.7 7.8 8.3 6.5 0.6 9.9 18.2 11.6 4.1 13.5 19.7 -22.0 6.3 11.1 IM Mixed-Asset Target Alloc Growth 0.6 0.6 -3.1 5.8 6.1 4.8 -1.3 6.3 19.8 13.0 -1.9 12.7 24.9 -30.7 6.4 11.7 Vanguard Balanced Index Fund (VBINX) Rank 8 8 10 17 12 10 18 12 71 79 3 43 84 7 55 62 Vanguard Balanced Index Fund (VBINX) Vanguard Balanced Index Fund Benchmark 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Cumulative Annualized Over/Under Relative Performance Over/Under Performance 0.0 0.4 0.8 -0.4 -0.8Return (%)6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Balanced Index Fund (VBINX)8.1 7.4 8.1 -0.1 1.0 1.1 0.1 -1.2 3.9 30.0 23y 4m Vanguard Balanced Index Fund Benchmark 8.3 7.5 8.3 0.0 1.0 1.1 0.0 N/A 4.0 0.0 23y 4m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 7.5 -1.1 0.0 20.0 23y 4m Manager Evaluation Vanguard Balanced Index Fund (VBINX) vs. Vanguard Balanced Index Fund Benchmark As of March 31, 2016 Note: Prior to June 1, 2005, the Vanguard Balanced Index was benchmarked to 60% DJ U.S. Total Stock Market Index/40% LB Aggregate Bond Index. From June 1, 2005 to December 31, 2009, the Index fund was benchmarked to 60% MSCI US Broad Market Index/40% BC Aggregate Index. From January 1, 2010 to January 14, 2013, the Index fund was benchmarked to 60% MSCI US Broad Market Index/40% BC Aggregate Float Adjusted Index. Starting January 15, 2013, the benchmark transitioned to 60% CRSP US Total Market Index/40% BC Aggregate Float Adjusted Index. 33 Portfolio Characteristics Portfolio Benchmark Wtd. Avg. Mkt. Cap ($M)113,793 113,839 Median Mkt. Cap ($M)1,223 813 Price/Earnings ratio 19.4 19.4 Price/Book ratio 3.1 3.1 5 Yr. EPS Growth Rate (%)8.2 9.9 Current Yield (%)2.1 2.1 Debt to Equity 0.4 0.4 Number of Stocks 3,087 3,664 Beta (5 Years, Monthly)0.58 1.00 Consistency (5 Years, Monthly)41.67 1.00 Sharpe Ratio (5 Years, Monthly)1.09 0.89 Information Ratio (5 Years, Monthly)-0.58 - Up Market Capture (5 Years, Monthly)62.78 - Down Market Capture (5 Years, Monthly)53.95 - Top Ten Equity Holdings Portfolio Weight (%) Benchmark Weight (%) Active Weight (%) Quarterly Return (%) Apple Inc 2.7 2.7 0.0 4.1 Microsoft Corp 1.9 1.9 0.0 0.3 Exxon Mobil Corp 1.6 1.6 0.0 8.2 General Electric Co 1.4 1.4 0.0 2.9 Johnson & Johnson 1.4 1.4 0.0 6.1 Berkshire Hathaway Inc 1.2 0.8 0.4 7.5 Facebook Inc 1.2 1.2 0.0 9.0 AT&T Inc 1.1 1.1 0.0 15.4 Alphabet Inc 1.0 1.0 0.0 -1.9 Amazon.com Inc 1.0 1.0 0.0 -12.2 % of Portfolio 14.5 14.1 Distribution of Market Capitalization (%) Vanguard Balanced Index Fund (VBINX) - Equity Holdings CRSP U.S. Total Market TR Index 0.0 15.0 30.0 45.0 60.0 >$75 Bil $20 Bil - $75 Bil $5 Bil - $20 Bil $0 - $5 Bil 41.6 27.7 18.9 11.8 41.6 27.6 18.9 11.8 Sector Weights (%) Vanguard Balanced Index Fund (VBINX) - Equity Holdings CRSP U.S. Total Market TR Index 0.0 5.0 10.0 15.0 20.0 25.0 Other Utilities Telecommunication Services Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 0.0 3.5 2.5 3.2 19.9 10.8 13.9 17.4 6.2 9.2 13.3 0.0 3.5 2.5 3.2 19.9 10.8 13.9 17.3 6.2 9.2 13.3 Manager Evaluation Vanguard Balanced Index Fund (VBINX) - Equity Holdings vs. CRSP U.S. Total Market TR Index As of March 31, 2016 34 Portfolio Characteristics Portfolio Benchmark Effective Duration 5.7 5.7 Avg. Maturity 8.0 8.0 Avg. Quality AA+AA+ Yield To Maturity (%)2.1 2.1 Credit Quality Distribution (%) Vanguard Balanced Index Fund (VBINX) - Fixed Income Holdings Barclays U.S. Aggregate Float Adjusted 0.0 25.0 50.0 75.0 100.0 AAAAAABBB68.4 4.8 12.4 14.4 69.5 3.8 12.5 14.2 Maturity Distribution (%) Vanguard Balanced Index Fund (VBINX) - Fixed Income Holdings Barclays U.S. Aggregate Float Adjusted 0.0 15.0 30.0 45.0 60.0 < 1 Yr1 < 3 Yrs3 < 5 Yrs5 < 10 Yrs10 < 20 Yrs> 20 Yrs0.0 23.8 25.2 34.1 3.9 13.0 1.0 22.7 25.8 33.8 3.9 12.8 Sector Distribution (%) Vanguard Balanced Index Fund (VBINX) - Fixed Income Holdings Barclays U.S. Aggregate Float Adjusted 0.0 15.0 30.0 45.0 60.0 TreasuriesAgenciesCreditMBSABSNon-USEmergingOtherCMBS40.6 3.9 23.3 20.4 0.6 7.2 2.0 0.0 2.0 41.0 2.5 27.3 20.5 2.8 4.9 0.0 1.0 0.0 Manager Evaluation Vanguard Balanced Index Fund (VBINX) - Fixed Income Holdings vs. Barclays U.S. Aggregate Float Adjusted As of March 31, 2016 35 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2011 - Mar-2016) Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement Income (VTINX)2.3 2.3 0.4 3.6 5.0 5.2 -0.2 5.5 5.9 8.2 5.2 9.4 14.3 -10.9 8.2 6.4 Vanguard Target Income Composite Index 2.3 2.3 0.6 3.9 5.1 5.3 0.1 5.8 6.0 8.4 5.3 9.4 14.3 -11.3 8.1 6.5 IM Mixed-Asset Target Today 1.8 1.8 -1.2 2.4 3.7 4.0 -1.4 3.9 5.4 8.9 2.8 9.5 18.1 -16.0 4.9 7.3 Vanguard Target Retirement Income (VTINX) Rank 10 10 4 16 10 7 7 10 38 67 8 53 82 10 1 60 Vanguard Target Retirement Income (VTINX) Vanguard Target Income Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 4.6 4.8 5.0 5.2 5.4 Return (%)3.7 3.8 Risk (Standard Deviation %) Vanguard Target Income Composite Index Vanguard Target Retirement Income (VTINX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement Income (VTINX)5.0 3.8 4.9 -0.1 1.0 1.3 0.2 -0.9 1.8 35.0 12y 5m Vanguard Target Income Composite Index 5.1 3.8 5.0 0.0 1.0 1.3 0.0 N/A 1.7 0.0 12y 5m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 3.8 -1.3 0.0 25.0 12y 5m Manager Evaluation Vanguard Target Retirement Income (VTINX) vs. Vanguard Target Income Composite Index As of March 31, 2016 36 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2011 - Mar-2016) Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement 2010 (VTENX)2.2 2.2 0.1 4.4 5.5 N/A -0.2 5.9 9.1 10.1 3.4 11.4 19.3 -20.7 7.7 N/A Vanguard Target 2010 Composite Index 2.2 2.2 0.3 4.6 5.6 N/A 0.0 6.1 9.3 10.2 3.3 11.5 19.3 -20.9 7.7 N/A IM Mixed-Asset Target 2010 1.6 1.6 -1.2 3.5 4.5 3.7 -1.2 4.1 8.7 9.8 0.8 10.8 23.3 -26.0 5.9 9.4 Vanguard Target Retirement 2010 (VTENX) Rank 30 30 15 18 17 N/A 8 7 50 46 6 35 81 21 8 N/A Vanguard Target Retirement 2010 (VTENX) Vanguard Target 2010 Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 5.2 5.4 5.6 5.8 Return (%)5.3 5.4 5.5 Risk (Standard Deviation %) Vanguard Target 2010 Composite Index Vanguard Target Retirement 2010 (VTENX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement 2010 (VTENX)5.5 5.4 5.4 -0.1 1.0 1.0 0.1 -0.8 3.0 35.0 9y 9m Vanguard Target 2010 Composite Index 5.6 5.4 5.5 0.0 1.0 1.0 0.0 N/A 3.0 0.0 9y 9m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 5.4 -1.0 0.0 30.0 9y 9m Manager Evaluation Vanguard Target Retirement 2010 (VTENX) vs. Vanguard Target 2010 Composite Index As of March 31, 2016 37 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2011 - Mar-2016) Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement 2015 (VTXVX)1.9 1.9 -0.6 5.3 6.0 5.3 -0.5 6.6 13.0 11.4 1.7 12.5 21.3 -24.1 7.5 11.4 Vanguard Target 2015 Composite Index 1.9 1.9 -0.4 5.5 6.1 5.3 -0.2 6.8 13.3 11.5 1.6 12.5 21.2 -24.4 7.6 11.5 IM Mixed-Asset Target 2015 1.7 1.7 -1.4 3.7 4.6 4.1 -1.3 4.4 10.4 10.8 -0.2 11.5 25.4 -29.3 6.1 10.4 Vanguard Target Retirement 2015 (VTXVX) Rank 38 38 23 7 9 9 12 4 22 35 23 33 77 17 25 32 Vanguard Target Retirement 2015 (VTXVX) Vanguard Target 2015 Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 5.8 6.0 6.2 6.4 Return (%)6.8 6.9 7.0 Risk (Standard Deviation %) Vanguard Target 2015 Composite Index Vanguard Target Retirement 2015 (VTXVX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement 2015 (VTXVX)6.0 6.9 6.1 -0.1 1.0 0.9 0.2 -0.7 4.2 25.0 12y 5m Vanguard Target 2015 Composite Index 6.1 6.9 6.2 0.0 1.0 0.9 0.0 N/A 4.2 0.0 12y 5m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 6.9 -0.9 0.0 30.0 12y 5m Manager Evaluation Vanguard Target Retirement 2015 (VTXVX) vs. Vanguard Target 2015 Composite Index As of March 31, 2016 38 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2011 - Mar-2016) Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement 2020 (VTWNX)1.7 1.7 -1.1 6.0 6.5 N/A -0.7 7.1 15.8 12.3 0.6 13.1 23.1 -27.0 7.5 N/A Vanguard Target 2020 Composite Index 1.7 1.7 -0.9 6.2 6.7 N/A -0.4 7.4 16.2 12.5 1.0 13.3 23.3 -27.4 7.6 N/A IM Mixed-Asset Target 2020 1.6 1.6 -2.1 3.9 4.7 3.9 -1.5 4.7 12.0 11.5 -0.5 12.3 25.9 -32.0 6.2 12.3 Vanguard Target Retirement 2020 (VTWNX) Rank 43 43 28 4 6 N/A 23 1 18 37 33 36 71 22 33 N/A Vanguard Target Retirement 2020 (VTWNX) Vanguard Target 2020 Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 6.0 6.3 6.6 6.9 7.2 Return (%)8.0 8.1 Risk (Standard Deviation %) Vanguard Target 2020 Composite Index Vanguard Target Retirement 2020 (VTWNX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement 2020 (VTWNX)6.5 8.1 6.6 -0.2 1.0 0.8 0.2 -1.3 5.1 25.0 9y 9m Vanguard Target 2020 Composite Index 6.7 8.1 6.8 0.0 1.0 0.8 0.0 N/A 5.0 0.0 9y 9m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 8.1 -0.8 0.0 30.0 9y 9m Manager Evaluation Vanguard Target Retirement 2020 (VTWNX) vs. Vanguard Target 2020 Composite Index As of March 31, 2016 39 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2011 - Mar-2016) Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement 2025 (VTTVX)1.5 1.5 -1.5 6.3 6.7 5.4 -0.8 7.2 18.1 13.3 -0.4 13.8 24.8 -30.1 7.6 13.2 Vanguard Target 2025 Composite Index 1.5 1.5 -1.3 6.6 7.0 5.5 -0.6 7.4 18.5 13.4 0.1 13.9 25.2 -30.4 7.6 13.4 IM Mixed-Asset Target 2025 1.4 1.4 -2.3 4.9 5.4 4.3 -1.4 5.2 15.9 13.0 -2.0 13.4 28.9 -35.0 7.2 13.1 Vanguard Target Retirement 2025 (VTTVX) Rank 44 44 32 8 11 11 24 4 24 45 18 39 80 16 45 49 Vanguard Target Retirement 2025 (VTTVX) Vanguard Target 2025 Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 6.3 6.6 6.9 7.2 7.5 Return (%)9.0 9.1 9.2 Risk (Standard Deviation %) Vanguard Target 2025 Composite Index Vanguard Target Retirement 2025 (VTTVX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement 2025 (VTTVX)6.7 9.1 6.9 -0.3 1.0 0.8 0.2 -1.1 5.8 35.0 12y 5m Vanguard Target 2025 Composite Index 7.0 9.1 7.2 0.0 1.0 0.8 0.0 N/A 5.8 0.0 12y 5m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 9.1 -0.8 0.0 25.0 12y 5m Manager Evaluation Vanguard Target Retirement 2025 (VTTVX) vs. Vanguard Target 2025 Composite Index As of March 31, 2016 40 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2011 - Mar-2016) Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement 2030 (VTHRX)1.3 1.3 -2.0 6.7 6.9 N/A -1.0 7.2 20.5 14.2 -1.3 14.4 26.7 -32.9 7.5 N/A Vanguard Target 2030 Composite Index 1.3 1.3 -1.7 6.9 7.2 N/A -0.8 7.5 20.9 14.3 -0.9 14.6 27.0 -33.3 7.6 N/A IM Mixed-Asset Target 2030 1.1 1.1 -3.0 5.1 5.4 3.9 -1.6 5.2 18.0 13.7 -2.6 13.6 28.8 -36.5 6.4 13.8 Vanguard Target Retirement 2030 (VTHRX) Rank 41 41 25 10 10 N/A 30 5 28 40 23 34 74 16 39 N/A Vanguard Target Retirement 2030 (VTHRX) Vanguard Target 2030 Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 6.3 6.6 6.9 7.2 7.5 7.8 Return (%)10.1 10.2 Risk (Standard Deviation %) Vanguard Target 2030 Composite Index Vanguard Target Retirement 2030 (VTHRX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement 2030 (VTHRX)6.9 10.2 7.2 -0.3 1.0 0.7 0.2 -1.0 6.6 35.0 9y 9m Vanguard Target 2030 Composite Index 7.2 10.1 7.5 0.0 1.0 0.7 0.0 N/A 6.5 0.0 9y 9m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 10.2 -0.7 0.0 25.0 9y 9m Manager Evaluation Vanguard Target Retirement 2030 (VTHRX) vs. Vanguard Target 2030 Composite Index As of March 31, 2016 41 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2011 - Mar-2016) Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement 2035 (VTTHX)1.1 1.1 -2.5 7.0 7.1 5.4 -1.3 7.2 22.8 15.2 -2.2 15.1 28.2 -34.7 7.5 15.2 Vanguard Target 2035 Composite Index 1.1 1.1 -2.2 7.3 7.4 5.5 -1.0 7.6 23.3 15.2 -1.9 15.2 28.7 -35.1 7.6 15.4 IM Mixed-Asset Target 2035 0.7 0.7 -3.3 5.7 6.0 4.2 -1.7 5.4 20.8 14.7 -3.3 14.6 31.0 -36.1 7.5 14.0 Vanguard Target Retirement 2035 (VTTHX) Rank 36 36 25 10 15 16 38 9 25 42 21 29 66 13 51 28 Vanguard Target Retirement 2035 (VTTHX) Vanguard Target 2035 Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 6.6 6.9 7.2 7.5 7.8 8.1 Return (%)11.1 11.2 11.3 11.4 Risk (Standard Deviation %) Vanguard Target 2035 Composite Index Vanguard Target Retirement 2035 (VTTHX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement 2035 (VTTHX)7.1 11.3 7.6 -0.3 1.0 0.7 0.3 -0.9 7.5 35.0 12y 5m Vanguard Target 2035 Composite Index 7.4 11.2 7.8 0.0 1.0 0.7 0.0 N/A 7.3 0.0 12y 5m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 11.2 -0.7 0.0 20.0 12y 5m Manager Evaluation Vanguard Target Retirement 2035 (VTTHX) vs. Vanguard Target 2035 Composite Index As of March 31, 2016 42 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2011 - Mar-2016) Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement 2040 (VFORX)0.8 0.8 -3.1 7.1 7.3 N/A -1.6 7.1 24.4 15.6 -2.5 15.2 28.3 -34.5 7.5 N/A Vanguard Target 2040 Composite Index 0.9 0.9 -2.7 7.4 7.6 N/A -1.2 7.6 24.8 15.6 -2.1 15.3 28.7 -35.1 7.6 N/A IM Mixed-Asset Target 2040 0.6 0.6 -3.9 5.7 5.8 4.0 -1.7 5.4 21.7 14.9 -3.9 14.6 30.7 -38.1 6.5 14.9 Vanguard Target Retirement 2040 (VFORX) Rank 37 37 27 10 9 N/A 44 12 17 33 21 37 76 4 33 N/A Vanguard Target Retirement 2040 (VFORX) Vanguard Target 2040 Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 6.6 6.9 7.2 7.5 7.8 8.1 Return (%)11.6 11.7 11.8 Risk (Standard Deviation %) Vanguard Target 2040 Composite Index Vanguard Target Retirement 2040 (VFORX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement 2040 (VFORX)7.3 11.7 7.7 -0.3 1.0 0.7 0.3 -1.1 7.8 35.0 9y 9m Vanguard Target 2040 Composite Index 7.6 11.7 8.0 0.0 1.0 0.7 0.0 N/A 7.6 0.0 9y 9m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 11.7 -0.7 0.0 20.0 9y 9m Manager Evaluation Vanguard Target Retirement 2040 (VFORX) vs. Vanguard Target 2040 Composite Index As of March 31, 2016 43 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2011 - Mar-2016) Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement 2045 (VTIVX)0.8 0.8 -3.1 7.1 7.3 5.5 -1.6 7.2 24.4 15.6 -2.5 15.2 28.2 -34.6 7.5 16.0 Vanguard Target 2045 Composite Index 0.8 0.8 -2.7 7.4 7.6 5.6 -1.3 7.6 24.8 15.6 -2.1 15.3 28.7 -35.1 7.6 16.2 IM Mixed-Asset Target 2045 0.5 0.5 -3.9 6.0 6.3 4.8 -1.8 5.5 23.1 15.5 -4.0 15.0 31.1 -38.5 6.8 16.0 Vanguard Target Retirement 2045 (VTIVX) Rank 36 36 30 13 16 28 44 13 27 44 15 43 87 11 49 56 Vanguard Target Retirement 2045 (VTIVX) Vanguard Target 2045 Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 6.6 6.9 7.2 7.5 7.8 8.1 Return (%)11.6 11.7 11.8 Risk (Standard Deviation %) Vanguard Target 2045 Composite Index Vanguard Target Retirement 2045 (VTIVX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement 2045 (VTIVX)7.3 11.7 7.7 -0.3 1.0 0.7 0.3 -1.1 7.8 35.0 12y 5m Vanguard Target 2045 Composite Index 7.6 11.7 8.0 0.0 1.0 0.7 0.0 N/A 7.7 0.0 12y 5m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 11.7 -0.7 0.0 20.0 12y 5m Manager Evaluation Vanguard Target Retirement 2045 (VTIVX) vs. Vanguard Target 2045 Composite Index As of March 31, 2016 44 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2011 - Mar-2016) Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement 2050 (VFIFX)0.8 0.8 -3.1 7.1 7.3 N/A -1.6 7.2 24.3 15.6 -2.5 15.2 28.3 -34.6 7.5 N/A Vanguard Target 2050 Composite Index 0.8 0.8 -2.7 7.4 7.6 N/A -1.3 7.6 24.8 15.6 -2.1 15.3 28.7 -35.1 7.6 N/A IM Mixed-Asset Target 2050 0.5 0.5 -4.2 6.0 6.1 4.1 -1.8 5.6 23.1 15.5 -4.4 14.8 31.4 -39.1 6.6 15.5 Vanguard Target Retirement 2050 (VFIFX) Rank 38 38 26 12 14 N/A 46 17 31 47 14 37 92 6 25 N/A Vanguard Target Retirement 2050 (VFIFX) Vanguard Target 2050 Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 6.6 6.9 7.2 7.5 7.8 8.1 Return (%)11.6 11.7 11.8 Risk (Standard Deviation %) Vanguard Target 2050 Composite Index Vanguard Target Retirement 2050 (VFIFX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement 2050 (VFIFX)7.3 11.7 7.7 -0.3 1.0 0.7 0.3 -1.1 7.8 35.0 9y 9m Vanguard Target 2050 Composite Index 7.6 11.7 8.0 0.0 1.0 0.7 0.0 N/A 7.7 0.0 9y 9m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 11.7 -0.7 0.0 20.0 9y 9m Manager Evaluation Vanguard Target Retirement 2050 (VFIFX) vs. Vanguard Target 2050 Composite Index As of March 31, 2016 45 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2011 - Mar-2016) Historical Statistics (Apr-2011 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement 2055 (VFFVX)0.8 0.8 -3.3 7.0 7.3 N/A -1.7 7.2 24.3 15.6 -2.3 N/A N/A N/A N/A N/A Vanguard Target 2055 Composite Index 0.8 0.8 -2.7 7.4 7.6 N/A -1.3 7.6 24.8 15.6 -2.1 N/A N/A N/A N/A N/A IM Mixed-Asset Target 2055+0.3 0.3 -3.9 6.3 6.4 N/A -1.6 5.4 23.3 15.6 -4.7 14.8 30.8 -40.7 N/A N/A Vanguard Target Retirement 2055 (VFFVX) Rank 34 34 31 20 22 N/A 55 17 38 50 1 N/A N/A N/A N/A N/A Vanguard Target Retirement 2055 (VFFVX) Vanguard Target 2055 Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 6.9 7.2 7.5 7.8 8.1 Return (%)11.6 11.7 11.8 Risk (Standard Deviation %) Vanguard Target 2055 Composite Index Vanguard Target Retirement 2055 (VFFVX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement 2055 (VFFVX)7.3 11.7 7.7 -0.3 1.0 0.7 0.3 -1.1 7.7 30.0 5y 6m Vanguard Target 2055 Composite Index 7.6 11.7 8.0 0.0 1.0 0.7 0.0 N/A 7.7 0.0 5y 6m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 11.7 -0.7 0.0 20.0 5y 6m Manager Evaluation Vanguard Target Retirement 2055 (VFFVX) vs. Vanguard Target 2055 Composite Index As of March 31, 2016 46 Historical Performance Three Year Rolling Percentile Ranking Risk and Return (Apr-2012 - Mar-2016) Historical Statistics (Feb-2012 - Mar-2016) Quarter Year To Date 1 Year 3 Years 5 Years 10 Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Vanguard Target Retirement 2060 (VTTSX)0.8 0.8 -3.2 7.1 N/A N/A -1.7 7.2 24.3 N/A N/A N/A N/A N/A N/A N/A Vanguard Target 2060 Composite Index 0.8 0.8 -2.7 7.4 N/A N/A -1.3 7.6 24.8 15.6 N/A N/A N/A N/A N/A N/A IM Mixed-Asset Target 2055+0.3 0.3 -3.9 6.3 6.4 N/A -1.6 5.4 23.3 15.6 -4.7 14.8 30.8 -40.7 N/A N/A Vanguard Target Retirement 2060 (VTTSX) Rank 34 34 31 19 N/A N/A 52 17 37 N/A N/A N/A N/A N/A N/A N/A Vanguard Target Retirement 2060 (VTTSX) Vanguard Target 2060 Composite Index 0 25 50 75 100Return Percentile Rank6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 3/16 7.8 8.1 8.4 8.7 9.0 Return (%)8.0 8.1 8.2 8.3 8.4 Risk (Standard Deviation %) Vanguard Target 2060 Composite Index Vanguard Target Retirement 2060 (VTTSX) Return Standard Deviation Excess Return Alpha Beta Sharpe Ratio Tracking Error Information Ratio Downside Risk Consistency Inception Date Vanguard Target Retirement 2060 (VTTSX)N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 4y 2m Vanguard Target 2060 Composite Index 10.8 9.1 10.7 0.0 1.0 1.2 0.0 N/A 4.4 0.0 4y 2m 90 Day U.S. Treasury Bill 0.1 0.0 0.0 0.1 0.0 N/A 9.1 -1.2 0.0 17.6 4y 2m Manager Evaluation Vanguard Target Retirement 2060 (VTTSX) vs. Vanguard Target 2060 Composite Index As of March 31, 2016 47 Manager Evaluation Ta rget-Date Funds Asset Allocation As of March 31, 2016 U.S.Equity 17.9%30.3%35.0%39.8%44.3%48.8%53.1%54.0%54.1%54.1% Va nguard Total Stock M arke t Index Fu nd 17.9%30.3%35.0%39.8%44.3%48.8%53.1%54.0%54.1%54.1% Non-U.S . Equ ity 12.0%19.0%23.3%26.6%29.5%32.5%35.4%35.9%35.9%35.8% Va nguard Total In ternational Stock In dex F und 12.0%19.0%23.3%26.6%29.5%32.5%35.4%35.9%35.9%35.8% Fi xe d In come 70.1%50.7%41.7%33.6%26.2%18.7%11.5%10.1%10.0%10.1% Va nguard Total Bo nd Marke t II In dex F und 37.4%28.4%28.3%23.7%18.5%13.2%8.1%7.1%7.0%7.1% Va nguard Total In ternational Bo nd Index Fund 15.9%13.4%12.2%9.9%7.7%5.5%3.4%3.0%3.0%3.0% Va nguard In fla tion-Pro tected Securit ie s Fund 16.8%8.9%1.2%0.0%0.0%0.0%0.0%0.0%0.0%0.0% TO TA L 100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0% Tar get Date 2030 Tar get Date 2035 Tar get Date 2040 Tar get Date 2055VanguardComponent Funds Re ti rement In come Tar get Date 2045 Tar get Date 2050 Tar get Date 2015 Tar get Date 2020 Tar get Date 2025 0% 10% 20% 30% 40% 50% 60% 70% 80% U.S.Equity Non-U.S.Equity Fi xed In come Retirement Inc om e Ta rget Date 2015 Ta rget Date 2020 Ta rget Date 2025 Ta rget Date 2030 Ta rget Date 2035 Ta rget Date 2040 Ta rget Date 2045 Ta rget Date 2050 Ta rget Date 2055 48 Capital Markets Review 49 Capital Markets Rev iew Economy U.S.Dollar Weakens and Oil Prices Stabilize as Fed Backtracks on Rate 30 40 50 60 70 80 90 10 0 Mar-72Mar-74Mar-76Mar-78Mar-80Mar-82Mar-84Mar-86Mar-88Mar-90Mar-92Mar-94Mar-96Mar-98Mar-00Mar-02Mar-04Mar-06Mar-08Mar-10Mar-12Mar-14Mar-16PercentCapacit y Utilization Motor Ve hi cl es Oil & Gas Tot al -40 -30 -20 -10 0 10 20 Dec-14Jan-15Feb-15Mar-15Apr-15May-15Jun-15Jul-15Aug-15Sep-15Oct-15Nov-15Dec-15Jan-16Feb-16Mar-16PercentCurrencies vs USD Aus tr alia China Indi a S.Kore a Ja pan Brazi l Can ada Mexi co Capacity Utilization Source: Federal Reserve Currencies vs. U.S. Dollar Source: Bloomberg U.S.Dollar Weakens and Oil Prices Stabilize as Fed Backtracks on Rate Hike •Crude oil prices fell to a low of $26/barrel during February,but finished the quarter slightly above the year-end price.The appearance of a deal between OPEC and Russia to stabilize production halted the price decline and led the market to its more natural level around $40-50/barrel.Natural gas prices declined to levels last seen in 1994.A mild winter helped to lower heating bills,but retailers blamed the weather for lower sales of jackets,sweaters and snow removal equipment.Since the fracking revolution took off in the last decade,natural gas prices have remained low,rising with the expected cold winter outbursts. •The Federal Reserve backtracked on its outlook for 100 bps of interest rate hikes during 2016.Markets reacted so negatively during January that the Fed speculated its December rate hike may have been the proximate cause.Other central banks continue to push rates lower or expand bond purchases as global growth forecasts trend lower.Commodity prices rebounded strongly following the Fed’s revised forecast for rate hikes.With a new estimate of 50 bps in 2016 rate hikes,emerging market stocks soared on the hope that the U.S.dollar would not strengthen significantly. •The U.S.dollar grew weaker throughout the quarter as persistently weak global demand lowered prospects of monetary tightening.Stock markets remained dependent on easy money policies,especially as earnings growth rates trend lower.An ongoing industrial slowdown,excluding autos,is worrying as indicators point to a low first quarter GDP. 0 2 4 6 8 10 12 14 16 18 0 20 40 60 80 100 120 140 160 Mar-98Mar-99Mar-00Mar-01Mar-02Mar-03Mar-04Mar-05Mar-06Mar-07Mar-08Mar-09Mar-10Mar-11Mar-12Mar-13Mar-14Mar-15Mar-16Natural Gas ($/MMBtu)Oil ($/barrel)Oil and Natural Gas Prices Oil (WT I C rude) Natural Gas Source: Bloomberg Oil and Natural Gas Prices 50 0.2% 11.3% 1.3% -2.1%-2.5%-3.8%-3.0% 19.1% 12.6% 5.7% 1.9% -1.5% 3.6% 1.3% -6.7%-4.9% -9.3% -6.5% 11.8% 7.2% 2.7% 0.3% -20.0% -10.0% 0.0% 10 .0% 20 .0% 30 .0% U.S. Do lla r Return Lo ca l Curre ncy Retu rn S&P 500 Sector Returns Capital Markets Rev iew Equities 1th Quarter 2016 World Equity Returns Developed Markets Emerging Markets -5.5% -5.1% 1.3% 1.6% 2.6% 3.6% 4.0% 5.0% 5.6% 15.6% 16.6% -15.0%-10.0%-5.0%0.0%5.0%10.0%15 .0%20 .0%25 .0% Healt h Care Financial s S&P 500 Cons.Disc . Info Tech Materials Ene rgy Indus trials Cons.Staples Utilities Telecom 1Q16 1st Quarter 2016 Value vs. Growth Returns U.S.Starts Year With Modest Gains;Emerging Markets Benefit from Currency Gains vs.the U.S.Dollar •The S&P 500 finished the quarter in positive territory with a 1.3%return.While the market started the quarter down on continued fears of global instability,a weaker dollar,and ECB bond buying expansion fueled a rally in the latter part of the quarter. With the exception of financials and health care,all sectors posted gains.Defensive sectors –telecom,utilities and consumer staples –led the market. •Emerging markets posted strong gains in the first quarter,benefiting from both favorable market returns and currency gains.Latin America was the strongest performing region.Among the BRICs,Brazil and Russia both posted large gains (28.5%and 15.8%)while China and India declined (-4.8%and -2.5%).Developed markets declined 3.0%,which would have been exacerbated if the dollar hadn’t experienced weakness during the quarter. •The first quarter saw a reversal in the performance of growth and value stocks,with value outperforming growth,especially in the small-cap space.In general,large cap stocks performed better than small cap stocks.The weakness in the small cap growth segment,however,pulled the overall small cap stock indices down.Mid-cap was the best performing U.S.market cap segment with a 3.8%return for the quarter. 0.7%1.6% -4.7% 1.7% -10.0% -5.0% 0.0% 5.0% 10.0% Russell 100 0 Gr owth Russell 100 0 Value Russell 200 0 Grow th Russell 200 0 Value 51 Trailing Ten-Year Credit Spreads Source: Barclays Source: Barclays Duration-adjusted Excess Returns to Treasuries (bps) Capital Markets Rev iew Fixed Income Best Period Second Best Period Wors t Period Second W orst Period 2009 2010 2011 2012 2013 2014 2015 1Q16 Aggre ga te 746 171 -114 226 93 10 -53 -4 Agency 288 77 -25 166 1 10 -133 23 MBS 495 225 -106 91 98 40 -5 -38 ABS 2496 169 52 246 24 53 44 16 CMBS 2960 1501 47 841 97 108 -28 58 Credit 1990 192 -322 693 226 -18 -169 18 Hi gh Yield 5955 974 -240 1394 923 -112 -577 77 Em erging 3797 508 -537 1503 -32 -120 3 123 0 250 500 750 1000 1250 1500 1750 2000 Option-Adjusted Spread (OAS)Barclays U.S. Credit U.S. Credit 10-Year Average Barclays U.S. HY HY 10-Year Average Source: US Dept of The Treasury Bond Markets Bounce Back After Sharp Declines to Start the Year •Fixed income markets improved during the quarter as accommodative responses from global central banks eased investors’fears over slowing global growth.Yields declined across the curve after the Fed reduced market expectations for rate hikes in 2016 from four to two. •Despite significant spread widening through mid-February,high yield (+3.4%) and investment grade (+4.0%)corporates ended the quarter with strong returns.High yield spreads tightened by 183 bps from their mid-quarter wides to finish four bps tighter as oil prices rebounded.Within investment grade credit,the financial sector saw spreads widen by 21 bps as low rates continue to weigh on bank profitability. •Locally denominated emerging market debt ended the quarter up 11.0%.EM currencies rallied against the dollar in March and posted their strongest monthly return since 1998.The Brazilian real (+10.3%),led the charge as sentiment improved towards commodity producers resulting in increased demand for riskier assets. •Treasury inflation protected securities (TIPS)had their strongest quarterly return in four years (+4.5%)as inflation expectations rose.Core CPI inflation rose to above 2%year-over-year and the Fed’s preferred core PCE inflation increased sharply to 1.7%. U.S. Treasury Yield Curve Change 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 0 5 10 15 20 25 30Yield to MaturityMaturity (Years) 3/31/2015 12/31/2015 3/31/2016 52 47% 42% 17% 14% 11%11%11%11% 6%6% 0% 10% 20% 30% 40% 50%Proportion of Fund SearchesFund Strategy Capital Markets Review Hedge Funds HFRI Index Performance –First Quarter and Trailing 12 Months Short Term Volatility Weighs on Hedge Fund Returns 2.0% -3.8% -5.1% -4.1% 2.3% -3.3% -6.3% 3.3% -4.5% -10.1% -0.7% 3.0% 0.4% -2.5% -0.8% 1.1% 1.2% -1.0% 0.6% -1.7% -1.3% -0.6% -12%-10%-8%-6%-4%-2%0%2%4%6%8% BC Aggregate Bond Index MSCI All-Country World Index Fund of Funds Hedge Fund Composite Merger Arbitrage Global Macro Event Driven Equity Market Neutral Equity Hedge Distressed Securities Convertible Arbitrage Q1 One Year Hedge Fund Strategies Sought by Investors over the Next 12 Months Source: Preqin Source: HFR Inc. Short Term Volatility Weighs on Hedge Fund Returns •Hedge fund manager performance was generally negative across strategies during the first quarter,with the exception of global macro (+1.2%),merger arbitrage (+1.1%)and equity market neutral (+0.6%).Hedge funds (-0.8%)underperformed compared to broad market indices,as the MSCI All-Country World Index (+0.4%) eked out a positive return due to strong results in March (+7.4%).The Barclays Capital Aggregate Bond Index (+3.0%)provided positive results each month of the quarter. •Equity hedge and distressed security strategies were among the worst performing strategies during the quarter,returning -1.7%and -1.3%,respectively.Defensive positioning proved detrimental for equity hedge managers,as global equity markets experienced a sharp reversal mid-quarter to end in positive territory. Distressed securities strategies were burdened by a lack of liquidity and high yield spread widening in January and early February but were able to recoup some of losses in March.March was the first positive month for distressed strategies since the summer of 2015. •Global macro and merger arbitrage strategies were standout performers. Systematic macro managers were key contributors within the macro strategy,while merger arbitrage benefited from M&A spread tightening during the quarter. •Hedge fund assets decreased by $39.6 billion through February 2016.The fall in assets can be attributed to investor outflows of $15.8 billion and negative performance attribution of $23.8 billion,according to HFR Inc.According to Preqin,a hedge fund investor database,replacement and new manager search activity is slightly up year-over year and investors are most interested in long/short equity and macro strategies. Hedge Fund Assets and Flows -$2 00,000 $20 0,000 $60 0,000 $1,0 00,00 0 $1,4 00,00 0 $1,8 00,00 0 $2,2 00,00 0 $2,6 00,00 0 $3,0 00,00 0 Assets ($MM)Net Asset Flow Esti mated Assets Source: HFR, Inc. 53 NCREIF 3 Mon.1 Y r.3 Y rs.5 Y rs.10 Y rs. NCREIF 2.9%13.3%12.0%12.2%7.8% Ap artments 2.7%12.0%10.9%11.9%7.3% In dustrials 3.2%14.9%13.5%13.2%7.8% Office 2.6%12.5%11.3%11.4%7.5% Retail 3.5%15.3%13.8%13.3%8.7% East 2.3%11.3%10.0%10.6%7.1% Midwest 2.4%12.4%11.4%11.2%6.9% South 3.0%14.0%13.2%12.7%8.1% West 3.6%15.3%13.5%13.7%8.5% Capital Markets Review Real Assets Real Estate Returns as of Fourth Quarter 2015 Source: NCREIF NCREIF Property Index Forecast Returns Source: LaSalle Investment Management Real Estate Performs Well; Precious Metals Post Double Digit Returns 2013 2014 2015 2016 2017 2018 2019 In come Return 5.6%5.4%5.0%5.0%5.0%5.0%5-6% Ap preciation 5.2%6.2%8.0%1-3%(3%) - (2%) (3%) - (2%)1-2% Total Return 11.0%11.8%13.3%6-8%1-3%2-4%5-7% PREA Consensus Survey 8.5%6.9%5.7% Actual Forecast S&P GSCI Returns –Commodities Post Declines with Exception of Precious Metals Real Estate Performs Well; Precious Metals Post Double Digit Returns •Private real estate returned 2.9%during the fourth quarter,bringing the 2015 return to 13.3%.By sector,retail properties performed best for the quarter and year,followed by the industrial sector.By region,the west and south performed best.For the year,income accounted for 5%of the index return,with appreciation accounting for the remainder.The income yield on the NCREIF Index declined to 1.2%in the fourth quarter,which breaks the previous quarter’s record for the lowest level in the index’s history.The yield on the real estate index ended 2015 at a 46 bps discount to the Baa corporate bond yield,much lower than the 15-year average of a 30 bps premium.Cap rates hit a new low. Estimates of future returns are low relative to the past five years. •U.S.and global REITs had strong first quarter returns of 6.0%and 5.2%, respectively.The U.S.and Asian Pacific markets contributed most to the global index return for the quarter.Europe and emerging markets returned 2.0%and 1.9%,respectively during the first quarter.U.S.REITs ended the quarter with a 3.7%yield,a nearly two percent premium relative to 10-year U.S.Treasuries.At quarter end,U.S.and global REITs are trading at premiums to their NAVs of 13%and 6%,respectively. •The Goldman Sachs Commodity Index declined -2.5%during the first quarter, driven by declines in crude oil prices.Precious metals were a bright spot, returning 16.0%,as investors sought gold’s safety in a relatively challenging quarter for risk assets. -2.5 -10.7 -0.9 1.9 16.0 -28.7 -41.6 -8.8 -19.0 2.7 -24.5 -34.2 -14.4 -12.6 -9.8 -17.4 -25.1 -15.3 -13.6 -5.5 -50 % -40 % -30 % -20 % -10 % 0% 10 % 20 % GSCI Crude Oil Agri cu lture In dus tria l Me tal s Prec io us Me tal s 1Q2 016 1 ye ar 3 ye ars 5 ye ars Source: S&P GSCI 54 Quarter Year To Date 1 Year 2 Years 3 Years 5 Years 7 Years 10 Years Domestic Equity Indices Dow Jones Wilshire 5000 1.2 1.2 0.2 6.1 11.3 11.0 17.0 6.9 S&P 500 1.3 1.3 1.8 7.1 11.8 11.6 17.0 7.0 Russell 1000 Index 1.2 1.2 0.5 6.4 11.5 11.4 17.2 7.1 Russell 1000 Growth Index 0.7 0.7 2.5 9.1 13.6 12.4 17.9 8.3 Russell 1000 Value Index 1.6 1.6 -1.5 3.8 9.4 10.2 16.3 5.7 Russell Midcap Index 2.2 2.2 -4.0 4.4 10.4 10.3 19.1 7.4 Russell Midcap Growth Index 0.6 0.6 -4.7 4.9 11.0 10.0 18.7 7.4 Russell Midcap Value Index 3.9 3.9 -3.4 3.9 9.9 10.5 19.5 7.2 Russell 2000 Index -1.5 -1.5 -9.8 -1.2 6.8 7.2 16.4 5.3 Russell 2000 Growth Index -4.7 -4.7 -11.8 -0.6 7.9 7.7 17.2 6.0 Russell 2000 Value Index 1.7 1.7 -7.7 -1.8 5.7 6.7 15.5 4.4 International Equity Indices MSCI EAFE -3.0 -3.0 -8.3 -4.7 2.2 2.3 9.7 1.8 MSCI EAFE Growth Index -2.1 -2.1 -3.7 -1.4 3.8 3.7 10.7 2.9 MSCI EAFE Value Index -4.0 -4.0 -12.8 -8.0 0.6 0.8 8.6 0.6 MSCI EAFE Small Cap -0.6 -0.6 3.2 0.1 7.3 5.6 15.1 3.4 MSCI AC World Index 0.2 0.2 -4.3 0.4 5.5 5.2 12.6 4.1 MSCI AC World ex US -0.4 -0.4 -9.2 -5.2 0.3 0.3 9.2 1.9 MSCI Emerging Markets Index 5.7 5.7 -12.0 -6.0 -4.5 -4.1 8.2 3.0 Fixed Income Indices Barclays U.S. Aggregate 3.0 3.0 2.0 3.8 2.5 3.8 4.5 4.9 Barcap Intermediate U.S. Government/Credit 2.4 2.4 2.1 2.8 1.8 3.0 3.8 4.3 Barclays U.S. Long Government/Credit 7.3 7.3 0.4 7.8 4.8 8.5 8.8 7.6 Barclays US Corp: High Yield 3.4 3.4 -3.7 -0.9 1.8 4.9 12.4 7.0 BofA Merrill Lynch 3 Month U.S. T-Bill 0.1 0.1 0.1 0.1 0.1 0.1 0.1 1.1 Barclays U.S. TIPS 4.5 4.5 1.5 2.3 -0.7 3.0 4.2 4.6 Citigroup Non-U.S. World Government Bond 9.1 9.1 7.7 -1.4 -0.2 0.2 2.5 4.0 JPM EMBI Global Diversified (external currency)5.0 5.0 4.2 4.9 3.4 6.2 9.7 7.2 JPM GBI-EM Global Diversified (local currency)11.0 11.0 -1.6 -6.5 -6.7 -2.0 4.9 5.0 Real Asset Indices Bloomberg Commodity Index Total Return 0.4 0.4 -19.6 -23.4 -16.9 -14.1 -4.5 -6.2 Dow Jones Wilshire REIT 5.2 5.2 4.8 14.5 11.1 12.1 24.9 6.3 Capital Markets Review Index Returns As of March 31, 2016 (Percentage Return) _________________________ Returns for periods greater than one year are annualized. 55