Vanguard Asset Management Services - For Employee Benefit Plans
Vanguard Asset Management Services—
For Employee Beneﬁt Plans
Investment expertise to help you manage
your beneﬁt plan assets
C O N T R I B U T I O N
Sharing our strengths:
Beneﬁts of a partnership with Vanguard
Managers of employee beneﬁt plans managing your plan assets—expertise
face an ongoing series of challenges. that will allow you to focus on the
Among them: keeping up with other important tasks involved with
demographic changes in their running your business.
workforce, and instituting sound
Because of our extensive experience
investment policies to meet funding
as a ﬁduciary, we’re thoroughly
and withdrawal requirements arising
familiar with the needs of plan
from those changes.
sponsors and the responsibilities you
Vanguard can help. We’re one face. Indeed, Vanguard has earned
of the world’s largest investment the trust of hundreds of organizations
management ﬁrms, responsible for throughout the country. Our client-
some $600 billion in assets. We’re also ﬁrst philosophy is reﬂected in a
one of the most respected because of commitment to low costs, which helps
our reputation for integrity and for to ensure that the plan assets entrusted
putting clients ﬁrst in everything we to your care are managed skillfully
do. As your partner, Vanguard can and efﬁciently.
provide investment expertise in
How we work with plan sponsors
Vanguard provides a full range Managing your investments
of investment management and prudently
administrative services for employee We take a disciplined, time-tested,
beneﬁt plans. We can assist you by: and long-term approach to investing.
Our more than 100 low-cost mutual
Developing a customized funds—which include both index and
investment policy statement actively managed funds—are run by
We take the time to understand the world-class managers who are closely
needs of plan sponsors and the monitored by Vanguard.
challenges they face in managing the
plan’s cash ﬂows. The result: a long- Responding to your concerns
term investment plan tailored to You can count on an experienced and
your needs. highly trained investment manager to
be available to discuss your needs and
to respond to your concerns. Your
dedicated investment professional will
manage your plan’s portfolio and help
you understand how different market
conditions will affect your plan.
Vanguard’s services at a glance
Investment services for plan sponsors
By analyzing your investment philosophy and objectives, we tailor a program to your
needs. We do all of the following:
Consult with you on an appropriate investment policy.
Determine your optimal asset allocation.
Recommend a customized, diversiﬁed portfolio of Vanguard® funds.
Test the effect of different market conditions on plan assets.
Manage your cash ﬂow to meet expected funding and withdrawal requirements.
Reallocate investments as the composition of your workforce changes.
Provide quarterly updates of investment performance.
Types of plans we manage
Vanguard provides expert management for a variety of pooled asset-beneﬁt
Deﬁned beneﬁt plans.
Deﬁned contribution plans, including proﬁt-sharing and money purchase pension plans.
Health and welfare plans.
Proven investment expertise
Vanguard is an experienced manager Leadership in indexing
of managers. We oversee investments Vanguard introduced index mutual
in more than 100 stock, bond, funds for individuals in 1976, and
balanced, and money market funds. we remain a leader in the ﬁeld:
We also provide convenient, one-stop We provide the broadest selection
access to leading investment of stock, bond, and balanced index
managers, both at Vanguard and at funds. Our index offerings include
ﬁrms we hire from around the world. funds that span the entire stock
This blend of internal and external market or the entire bond market,
investment managers provides your while others target speciﬁc segments
organization an unmatchable of each market (such as by investment
combination of expertise and diversity style or market capitalization). Still
of thought. others combine stocks and bonds in
balanced index funds. Importantly,
our index funds—all of which are
Vanguard’s goal is to help you meet your ﬁduciary responsibility managed by Vanguard—feature some
of the lowest expense ratios in the
by ensuring that the assets in your beneﬁt plan consist of funds industry,* which directly beneﬁts our
shareholders’ bottom line.
managed by some of the world’s best advisors. You can be certain
that these funds will stay true to their investment objectives and
operate at the lowest reasonable cost.
ﬁduciary *Source: Lipper Inc.
A manager of world-class advisors
About 60% of the assets in Vanguard® funds are actively managed by our internal and
external advisors. Our external advisors—all of whom are highly respected and were
selected only after undergoing a rigorous review process—bring a wide variety of
independent thought. Moreover, these talented and seasoned managers bring a
continuity of investment approach not easily found elsewhere. Their relationships with
Vanguard, on average, are nearly twice the average industry tenure.*
Some of our external advisors are:
Barrow, Hanley, Mewhinney & Strauss, Inc. (Dallas, Texas)
Chartwell Investment Partners (Berwyn, Pennsylvania)
Grantham, Mayo, Van Otterloo & Co. LLC (Boston, Massachusetts)
Marathon Asset Management Limited (London, United Kingdom)
Mellon Capital Management Corporation (San Francisco, California)
PRIMECAP Management Company (Pasadena, California)
Sanford C. Bernstein & Co., LLC (New York, New York)
Schroder Investment Management North America Inc. (London, United Kingdom)
Wellington Management Company, LLP (Boston, Massachusetts)
*Source: Morningstar, Inc., November 30, 2003.
A major manager of ﬁxed Our superior long-term performance
income funds compared with other bond and money
Vanguard is the nation’s largest market funds can be attributed largely
manager of bond mutual funds and to our low-cost operating structure.
one of the largest managers of money Because of the cost advantage this
market funds.* Our ﬁxed income structure provides, Vanguard’s ﬁxed
funds seek to outperform their income managers aren’t tempted to
competitors over the long run, and, take risky, alternative strategies to
almost without exception, they have. boost yields.
(For the ten years ended September 30,
2003, all 29 of Vanguard’s actively Disciplined fund management
managed money market and bond funds Whether managed internally or
outperformed at least 80% of comparable externally, assets at Vanguard are
mutual funds. Source: Lipper Inc. Funds invested exactly as promised. You
with at least a 10-year history as of can count on our funds to stay true
September 30, 2003, were included. Past to their stated objectives year after
performance cannot be used to predict year, whatever the market conditions,
future returns. Investment returns and and to remain immune to the fads
principal value will ﬂuctuate, so that that come and go in the investment
investors’ shares, when sold, may be worth business. We make sure that our fund
more or less than their original cost. For managers don’t take extra risks in a
current performance, which may be higher drive for performance.
or lower than that cited, visit our website
Vanguard clearly speciﬁes investment
mandates at the outset, hires advisors
whose style and expertise support
Our asset management services are designed to manage the those mandates, and then closely
monitors fund management and
growth of your plan assets with the objective of meeting your performance.
required beneﬁt payouts over the long term.
*As of September 30, 2003. Source: Lipper Inc.
Vanguard’s diverse fund lineup underscores
a commitment to prudent asset management
Vanguard funds . . . reﬂecting strength . . . and diversity of
span the asset class in both active and passive thought among fund
spectrum . . . management . . . managers.
51% 61% 68%
■ Stock funds ■ Actively managed funds ■ Managed within
■ Bond funds ■ Index funds Vanguard
■ Balanced funds ■ Managed by external
■ Money market funds
Vanguard data as of September 30, 2003.
A time-tested approach
to investing plan assets
Vanguard’s asset management services Creating your custom portfolio
are based on sound, time-tested The development of your portfolio is
investment principles. We don’t based on a clear understanding of the
promote hot funds or follow trendy age distribution of your workforce,
strategies. Instead, we apply a expected future payouts, and your risk
proprietary methodology to create a proﬁle. Our process includes the
portfolio tailored to your long-term following:
investment strategy, spending goals,
and tolerance for risk. Investment policy consulting
Starting with a top-down strategic We work with you to review your
perspective, we allocate your funds current investment policy or to
among the major asset classes— develop a policy that reﬂects your
stocks, bonds, and (possibly) cash investment objectives. This can
investments. This asset allocation include helping you deﬁne clear
allows for adjustments based on objectives given expected
changing circumstances, including contributions and withdrawals,
important changes in the ﬁnancial and risk tolerance.
markets. Within each asset class, we
emphasize broad diversiﬁcation to Strategic asset allocation analysis
further temper long-term portfolio We determine the best mix of
volatility. Only then do we recommend assets consistent with your plan’s
speciﬁc Vanguard investments. demographics, goals, and risk proﬁle.
We consider your current holdings,
contribution and withdrawal
requirements, asset-class returns, and
inﬂation. We test and analyze the
interaction of these factors on your
objectives over a broad range of
economic cycles. Finally, we conﬁrm
your tolerance for risk through a
series of “what if ” analyses.
Portfolio development Custom reporting
After determining a strategic asset Our detailed quarterly performance
allocation, we undertake further reports make it easy for you to
analysis to choose an appropriate monitor your portfolio. Each report
subasset allocation. This involves includes a discussion of asset
diversifying within each asset class. allocation, comprehensive
With equities, for example, we performance and ﬁnancial market
consider funds that invest in growth information, and (if you receive trust
and value stocks; funds that invest services) a detailed account of trust
in small-, medium-, and large- activity. These timely, concise reports
capitalization ﬁrms; and funds that provide an excellent basis for
invest in the United States and presentations to plan trustees or
abroad. In bond funds, our subasset your investment committee.
allocation process considers factors
such as maturity and credit quality. Comprehensive analysis
As a ﬁnal step, we select speciﬁc We also take a broader look at the
Vanguard funds—both index and progress of your portfolio. Each year
actively managed. we perform a comprehensive review
of your investment assets and verify
Ongoing portfolio management that investment objectives are
We will continually monitor your consistent with expected workforce
portfolio to ensure that your program demographics and cash ﬂows.
remains suitable. This includes
managing your cash ﬂows and
rebalancing assets when needed
because of market developments
or changes in objectives or
circumstances. We also provide
Attentive, personalized service
Your personal day-to-day contact Underscoring the importance we place
at Vanguard will be a dedicated on service is the unusually low ratio of
investment manager. The goal of clients assigned to each client team.
Vanguard’s experienced investment
Our investment managers are salaried
managers is to understand each plan
and receive no commissions or extra
sponsor’s unique needs and to be
compensation for making speciﬁc
readily available to answer questions
recommendations. Their job, quite
and discuss concerns.
simply, is to serve your organization’s
All our investment managers have long-term interests.
extensive education and training, and
considerable experience in the
ﬁnancial services industry.
As a Vanguard client, you will draw not only on the full range of
resources we offer but also on our extensive expertise in managing
employee plan assets.
Why Vanguard stands apart
The Vanguard Group has never been World-class expertise
a typical investment management Our investment management team
company. We offer a unique includes some of the most experienced
combination of beneﬁts, including: asset managers in the industry.
Industry leadership Responsibility—and stability
With some $600 billion in assets Because of our unique corporate
invested in more than 17 million structure, we have no obligation to
shareholder accounts, Vanguard is generate proﬁts for outside owners.
one of the largest investment Vanguard is owned by its funds and
management companies. exists only to serve their shareholders.
This is what drives us to put our
Diverse investment choices clients ﬁrst in everything we do,
We offer more than 100 actively including returning all proﬁts to
managed and index funds—one of the shareholders by keeping expenses low.
most diverse fund selections available.
Commitment to low costs
Vanguard is widely recognized for its
Plan sponsors can beneﬁt from the unparalleled strengths leadership in keeping operating costs
at the lowest reasonable levels
The Vanguard Group has to offer. We bring exceptional, without sacriﬁcing service quality.
Keeping costs as low as possible is
client-centered service, disciplined investment expertise, and especially important for plan
sponsors, which—as ﬁduciaries—
an unrivaled reputation for integrity and effective stewardship. must demonstrate prudence and
efﬁciency in the management of
assets entrusted to them.
An invitation from Vanguard
Plan sponsors who choose Vanguard Please call us if you have questions or
to manage their investment assets would like more information. We’re
expect us to deliver competitive available at1-800-335-2412 on business
long-term performance—based on a days from 8:30 a.m. to 6 p.m., Eastern
consistent, risk-sensitive investment time. We look forward to helping your
approach—and exceptional client organization achieve its goals.
service, all at the lowest possible cost.
This extraordinary value we provide
for investors stems naturally from
Vanguard’s corporate structure, which
aligns our interests with yours.
We invite you to learn more about the advantages of
Vanguard’s asset management services, and how we can
help you fulﬁll your ﬁduciary responsibility.
Completing this questionnaire will provide Vanguard
Asset Management Services with the information we
need to evaluate your needs effectively. (You will be
under no obligation by completing this questionnaire.)
If you have questions, call us at 1-800-335-2412.
1. Type of organization: ■ Endowment ■ Foundation ■ Corporation
■ Association ■ Qualified Retirement Plan ■ Trust
■ Other (please specify)
2. Name of organization:
Tax identification number
3. Does your organization have a website?
■ Yes ■ No
If yes, what is the address?
4. Your name:
5. Primary contact at organization:
Telephone number (day)
Telephone number (evening)
1. What is the total value of your organization’s investable assets?
Provide a brief description of your organization’s purpose and the intended use
of the assets. If you have an investment policy statement, please enclose a copy.
2. Which of the words below best describes the risk tolerance for these assets?
■ Conservative ■ Moderate ■ Aggressive
3. Provide the following investment information, if known:
4. How much of the assets would you like Vanguard to manage?
5. Are any of the assets currently invested with Vanguard?
■ Yes ■ No
If yes, what is the value of those assets? $
6. Do you wish to transfer any outside assets to Vanguard?
■ Yes ■ No
If yes, please attach a current statement for these assets.
7. Are the assets subject to any income or capital gains taxes?
■ Yes ■ No
If yes, please specify.
Other Financial Information
1. Describe your organization’s historical and anticipated cash flows.
Contributions ($ or %) Withdrawals ($ or %)
Two years ago
Three years ago
2. Describe restrictions on spending from your portfolio.
3. Describe significant changes to contributions or withdrawal rates that you expect in the future.
4. Describe liquidity needs not mentioned above that we should know about.
5. If your organization has a qualified retirement plan, list the type of plan (e.g., profit-sharing plan, money
purchase plan, defined benefit plan).
Number of participants
Average age of participants
Thank you for taking the time to complete this questionnaire. The more accurate and complete the
information you provide, the better we can tailor your investment program to your organization’s specific
financial situation. Use the space below to provide any additional information not already captured in this
profile, or to tell us about other issues or planning concerns you may have.