Asset allocation

report
December quarter 2022
Contents

Quarter in review 3

Economic outlook 4

Market outlook 7

Long-term market outlook 9

Asset allocation 12
Quarter in review

• Markets advanced through the December

quarter to close out a volatile year for
equities and bonds alike. Focus remained on Figure 1. Global equities gained
central banks’ efforts to stabilise inflation
12%
and an easing of China’s zero-COVID policy.
• Signs of slowing inflation spurred an early-
6
quarter rally, but markets reversed course
in December as central banks reaffirmed a
commitment to tight policy. Overall, markets 0

Total Return
closed the year steeply lower, in contrast to
the double-digit equity market gains of 2021. −6

• Most developed markets rallied 5%–10%

early in the quarter, but a reversal in −12

December left gains more subdued. In local

currency terms, global equities gained 7.5% −18
for the quarter and fell 15.6% for the year
(Figure 1). STOXX ASX FTSE S&P MSCI MSCI MSCI Nikkei
600 300 100 500 AC EM China A 225
• Closer to home, the Australian market was World Onshore
supported by elevated commodity prices
Q4 2022 2022
and avoided the worst of global drawdowns,
with the S&P/ASX 300 Index ending the year Note: Returns are cumulative total returns in local currency.
down 1.8%. Sources: FactSet, as of 31 December 2022.

• Performance within emerging markets was

dispersed as markets weighed inflation, a
softening U.S. dollar, and China’s relaxation Figure 2. AUD indexes broadly advanced in Q4
of zero-COVID policies. A relatively stronger
15%
Australian dollar detracted 3.3% from global
equities on an unhedged basis for AUD 10
investors (Figure 2).
5
• Bond markets continued to reflect central
bank progress on tackling inflation and
Total Return

0
growing concerns of recession for 2023.
Meanwhile, the Bank of Japan surprised by −5
widening its target range for the 10-year
−10
yield, increasing the maximum yield from
0.25% to 0.5%, which markets quickly tested. −15
• Bond indexes ended the quarter mostly flat
−20
as global bonds gained 0.6% (AUD hedged),
while Australian bonds gained 0.4%. Yields A-REITs Aust. Global U.S. Global Aust.
fell through most of the quarter before Equities Equities Equities Agg. Agg.
(Hedged)
reversing in December to tie out the year.
Australian and U.S. 10-year government bond Q4 2022 2022 YTD
yields rose 0.08% and 0.16% respectively, Note: Returns are cumulative total returns denominated
despite swings of 0.8%–0.9% during in AUD.
the quarter. Source: FactSet, Refinitiv, as of 31 December 2022.

Vanguard | Asset allocation report – December quarter 2022 3

 Economic outlook

• Inflation has continued to trend higher household and business balance sheets
across most economies, in many cases buoyed by pandemic-era stimulus.
setting multidecade highs. The action • The war in Ukraine continues, threatening
taken, and likely to be taken in the months another surge in energy and food
ahead, by central banks reflects a promising commodities prices. Effective monetary
effort to combat elevated inflation that policy requires good decision-making,
has proven more persistent and broad- good communication, and good luck. The
based (Figure 3). current backdrop is missing the good-
• Supply-demand imbalances linger in many luck component, posing a challenge for
sectors as global supply chains have yet to policymakers whose fiscal and monetary
fully recover from the COVID-19 pandemic tools are less effective combating
and as demand is supported by strong supply shocks.

Figure 3. Globally coordinated monetary tightening

10% Forecast
Central bank policy rates

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

Australia United States United Kingdom Europe

Note: Dotted lines represent Vanguard’s forecast for policy rates as of October 31, 2022.
Sources: Vanguard calculations, based on data from Thomson Reuters Datastream and Bloomberg.

Vanguard | Asset allocation report – December quarter 2022 4

• Energy supply and demand concerns,
diminishing capital flows, declining trade
volumes, and falling output per person mean
that, in all likelihood, the global economy will
enter a recession in the coming year.
• Global conditions today and those
anticipated in the coming months are
similar to those that have signalled global
recessions in the past. Although all recessions
are painful, this one is unlikely to be historic.
Our base case is a global recession in 2023
brought about by the efforts to reduce
inflation (Figure 4).
• We place the odds of a recession in Australia
around 40%, far lower than the 90% odds
for the United States, United Kingdom and
euro area. This is because wage and inflation
pressures are more muted in Australia,
meaning interest rates will not need to rise
as much. Australia also stands to benefit
from a cyclical rebound in China, and as a
net exporter of commodities given elevated
commodity prices.

Figure 4. Global recession indicator is at dangerous levels

100% Indicates global recession

80
Recession
probability
60 50%
probability

40

20

1971 1981 1991 2001 2011 2021

Note: Probabilities derived from vector similarity matrixes for global unemployment, real per capita GDP, industrial
production, foreign direct investment, trade, and global energy demand were used to identify similarities between the period
under consideration and other recessionary periods.
Sources: World Bank, British Petroleum Statistical Review of World Energy, OECD, Federal Reserve Bank of St. Louis FRED
database, OeNB, CPB Netherlands Bureau for Economic Policy Analysis, and UNCTAD, as of October 31, 2022. Global
unemployment data are from Kose, Sugawara, and Terrones (2020).

Vanguard | Asset allocation report – December quarter 2022 5

• Although central banks generally seek
to avoid recessions, inflation dynamics
mean that supply-side pressures must
continue to ease and that policymakers must
tighten financial conditions to lessen the
inflationary push from elevated demand.
That said, households, businesses, and
financial institutions are in a much better
position to handle an eventual downturn,
to the extent that drawing recent historical
parallels seems misplaced.
• Whether history views it as mild or significant
matters little for those affected by the
downturn. But failing to act aggressively to
combat inflation risks harming households
and businesses through entrenched
inflationary pressures that last longer than
the pain associated with any one recession
(Figure 5).

Figure 5. Long-term inflation expectations have remained anchored

8%

June June June June June June June June June June
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Median 1-year-ahead expected inflation rate Median 3-year-ahead expected inflation rate
10-year expected inflation (FRED)

Notes: Global inflation expectations were calculated for G7 countries based on GDP weights. Subcomponent contributions
were calculated on a GDP-weighted basis. For CPI subcomponent weights at the country level, 2021 weights were used for
the U.S., the U.K., the European Union, and Canada; 2020 weights were used for Japan. West Texas Intermediate (WTI) spot
data were used for oil prices, and WTI forward prices were used for forecast estimates.
Sources: Survey of Consumer Expectations, Federal Reserve Bank of New York, and Federal Reserve Bank of St. Louis FRED
database.

• Growth is likely to end 2023 very weak or
slightly negative in most major economies
outside of China. Unemployment is likely to
rise over the year but nowhere near as high
as during the 2008 and 2020 downturns.
• Through job losses and slowing consumer
demand, a downtrend in inflation is likely to
persist through 2023. We don’t believe that
central banks will achieve their targets of 2%
inflation in 2023, but they will maintain those
targets and look to achieve them through
2024 and into 2025—or reassess them when
the time is right.

Vanguard | Asset allocation report – December quarter 2022 6

Market outlook

• Our return outlook—which has been on a
steady downward trajectory since 2009—is
ticking up. This is especially true in fixed
income, where our global bond forecasts are
more than two percentage points higher than
they were a year ago.
• Although rising interest rates have created
near-term pain for fixed income investors,
we expect that those with sufficiently long
investment horizons will be better off in
end-of-period wealth terms by the end of
the decade than if they had just realised our
return forecast from the end of last year.
• Against a backdrop of rapidly rising rates,
our fixed income return outlook for the next
decade is significantly better than last year’s
projections, at 3.5%–4.5%, based on more
attractive valuations.
• Expected returns for several international
bond markets in local currency are lower
than those of Australian bonds in light of the
relatively lower yields in these markets, but
the differences are muted once we account
for currency impacts.
• High inflation and rising real interest rates
have caused the cyclically adjusted price/
earnings (CAPE) ratio for many global equity
markets and our associated estimates of
fair value to decline. While equity valuations
have improved, valuations remain divergent
across regions.
• Figure 6 shows our estimate for the U.S.
equity market, where valuations reached a
level not seen since the dot-com bubble. Our
median fair-value estimate sits at 23.7 times
the trailing 10-year average of real earnings.

Figure 6. U.S. equity valuations are more attractive than they were a year ago

50 Dot-com
bubble

40
price/earnings ratio
Cyclically adjusted

30

20

10

1950 1960 1970 1980 1990 2000 2010 2020

CAPE Fair-value range

Notes: The fair-value CAPE is based on a statistical model that corrects CAPE measures for the level of inflation
and interest rates. The statistical model specification is a vector error correction including equity-earnings yields,
10-year trailing inflation, and 10-year government bond yields estimated from January 1940 for the U.S. and January
1970 for Australia, to 30 September 2022. Details were published in the 2017 Vanguard research paper Global Macro Matters:
As U.S. Stock Prices Rise, the Risk-Return Tradeoff Gets Tricky. A declining fair-value CAPE suggests that higher equity-risk
premium (ERP) compensation is required, whereas a rising fair-value CAPE suggests that the ERP is compressing.
Sources: Vanguard calculations, based on data from Robert Shiller’s website, at aida.wss.yale.edu/~shiller/data.htm,
the U.S. Bureau of Labor Statistics, the Federal Reserve Board, Refinitiv, Russell indexes, FactSet, Barclays Live, and
Global Financial Data.

Vanguard | Asset allocation report – December quarter 2022 7

 • Meanwhile, Australian valuations have traded • U.S. profit margins are currently
in a narrower range closer to fair-value. at a cyclical high, and we expect them
Higher (lower) inflation and more (less) to decline toward our estimates in the
aggressive central bank policy could cause coming years, mostly because of higher
our fair value to settle lower (higher). labor costs. Longer term, we expect a modest
decline in margins as a slower pace in the
trend of globalisation is partially offset
by higher productivity (Figure 7).

Figure 7. U.S. profit margins may face cyclical pressure in the near term, but should remain above
long-term averages

12% Cyclical
pressures
U.S. profit margins

9
Longer-term
trend
6

1978 1984 1990 1996 2002 2008 2014 2020

Total profit margins Fair value Fair-value range

Notes: Profit margins are broken into their cyclical and trend components and forecasted using an Ordinary Least Squares
(OLS) regression model with trade intensity (sum of imports and exports) and labor costs as the independent variables. We
expect higher productivity to drive higher profit margins given the linear relationship between productivity and profit margins
and our view for higher productivity based on our proprietary Idea Multiplier. For more information on the Idea Multiplier, see
The Idea Multiplier: An Acceleration in Innovation Is Coming (Davis et al., 2019).
Sources: Vanguard calculations, based on data from Refinitiv, as of June 30, 2022.

Vanguard | Asset allocation report – December quarter 2022 8

 Long-term market outlook

The charts below shows the Vanguard The white circles show the median volatility
Capital Markets Model (VCMM) return forecasts. This represents the volatility of
forecasts over the next 10 years for the asset classes that can be expected over
a range of asset classes and Vanguard’s the 10-year period. The chart shows that
Diversified Funds. equities are expected to produce a higher
return over a 10-year period than bonds,
It shows two concepts: the range however the trade-off is that an investor
of annualised 10-year nominal returns can expect a more volatile experience and
and the median volatility experienced. greater uncertainty over the end point, which
could be a much wider range of outcomes.
The bars show the range of return
outcomes over a 10-year period. The An important point to remember is that
central return expectations for the asset asset returns are not perfectly correlated,
class or portfolio are shown in the middle which means that if an Australian equity
of the bars. Observations in the optimistic return over 10 years is in the optimistic range,
or pessimistic regions should not come as this does not necessarily mean that Australian
a surprise though; goals and portfolios bond returns will also be in the optimistic
should always be positioned with these range. Combining assets can therefore
possibilities in mind. present strong diversification benefits.

Figure 8a. Projected 10-year nominal return outlook

25%

20%
Return distribution

15%
Median
volatility
10%
95th
Optimistic
5% 75th
Central
expectation
0% 25th
Pessimistic
5th
AU AU Global AU Global AU Conservative Balanced Growth High
Inflation Equity Equity Bonds Bonds Cash Growth
(unhedged) (hedged)

Source: Vanguard, December 2022 using 30 September 2022 VCMM Simulation.

Vanguard | Asset allocation report – December quarter 2022 9

 Figure 8b. Projected 10-year nominal return median volatility outlook

RETURN PERCENTILE
MEDIAN
5TH 25TH MEDIAN 75TH 95TH VOL.

Australian Inflation 0.1% 1.3% 2.1% 2.8% 4.0% 2.4%

Australian Equity -3.2% 2.0% 5.5% 9.0% 14.3% 21.7%

Global Equity (unhedged) -1.7% 3.2% 6.6% 10.2% 15.5% 19.6%

Australian Bonds 2.9% 3.7% 4.2% 4.7% 5.6% 5.6%

Global Aggregate Bonds (hedged) 2.6% 3.7% 4.4% 5.2% 6.4% 4.7%

Australian Cash 2.4% 3.2% 3.9% 4.6% 5.6% 1.9%

Conservative 3.3% 4.5% 5.4% 6.3% 7.8% 5.7%

Balanced 2.8% 4.7% 6.0% 7.4% 9.5% 8.9%

Growth 2.0% 4.6% 6.4% 8.3% 11.2% 12.4%

High Growth 0.9% 4.3% 6.6% 9.1% 12.7% 16.1%

Source: Vanguard, December 2022 using 30 September 2022 VCMM Simulation.

The next two charts show the trade-off Highlighting the importance of managing
between targeting a CPI+ return target and expectations, it also means there is the
the risk of a loss along the way. increased probability of experiencing
a negative return or a large annual loss in
Taking more risk means that an investor at least one year over the 10 year period.
increases the probability that they will achieve
their target over 10 years.

Figure 9a. Probability of achieving real return Figure 9b. Downside risks
Probability of outcome in at least

100% 100%
Probability of achieving target

one year in the next 10 years

in the next 10 years

80 80

60 60

40 40

20 20

2% or 3% or 4% or 5% or 0% or –10% or –20% or
more more more more worse worse worse

10-year annualised real return Nominal return in any given year

Conservative Balanced Growth High Growth December 2021

Notes: The projections or other information generated by the VCMM regarding the likelihood of various investment outcomes
are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Distribution of
return outcomes from the VCMM are derived from 10,000 simulations for each modelled asset class
in AUD. Results from the model may vary with each use and over time.
Source: Vanguard, December 2022 using 30 September 2022 VCMM and 31 December 2021 Simulations.

Vanguard | Asset allocation report – December quarter 2022 10

 About Vanguard’s Investment Strategy Group
Vanguard’s Investment Strategy Group is a global team of economists and investment
and portfolio construction strategists with a wide variety of specialties, ranging from
monetary policy to index construction to market trends. Their research serves as the basis
for Vanguard’s investment principles and methodology, guides Vanguard’s global leadership
and influences decisions about our investment offerings and portfolio construction.

Research-based investment approach

As part of Vanguard’s broader Investment Management Group, ISG plays an essential role
in developing Vanguard’s investment methodology, which is carried through in the implicit
and explicit advice solutions available to our clients. Our global chief economist and head
of ISG reports directly to Vanguard’s global chief investment officer. We work closely with
Vanguard’s in-house portfolio managers. Notably, our global chief economist is integrated
into Vanguard Fixed Income Group through our portfolio management process. Through that
process, ISG advises our fixed income investment managers on the macroeconomic outlook,
expected monetary policy and other factors to support day-to-day portfolio management.
Vanguard’s investors around the world benefit from our collaborative approach to investment
management, research and thought leadership.

Vanguard Capital Markets Model

The Vanguard Capital Markets Model® (VCMM) projections are based on a statistical analysis
of historical data. Future returns may behave differently from the historical patterns captured
in the VCMM. More important, the VCMM may be underestimating extreme negative scenarios
unobserved in the historical period on which the model estimation is based. The VCMM is a
proprietary financial simulator developed and maintained by Vanguard’s Investment Strategy
Group. It is a long-term tool that takes into account current macroeconomic conditions and
equity and bond valuations to forecast distributions of future returns for a wide range of
asset classes and portfolios. The primary value of the VCMM is in its application to analysing
potential client portfolios. VCMM asset-class forecasts – comprising distributions of expected
returns, volatilities, and correlations — are key to the evaluation of potential downside risks,
various risk-return trade-offs, and diversification benefits of various asset classes.

Vanguard | Asset allocation report – December quarter 2022 11

Asset allocation
Vanguard’s approach to asset allocation is
to provide long-term returns that match
investors’ desired level of risk. The broad
allocations to defensive (fixed income)
and growth (equities) are the main factors
influencing the risk-return profiles of our asset
Return
allocation strategies.
Our asset allocation approach is designed with
a medium to long-term investor in mind (a time
horizon of at least five years), reflecting the
reality that the majority of Australian investors
need to accept some market risk in order to
reach their investment goals.
Why diversification matters
We believe that a successful investment
strategy starts with an asset allocation
suitable for its objective. In practice,
diversification is a rigorously tested
application of common sense: markets
will often behave differently from each
other—sometimes marginally, sometimes
greatly—at any given time.
Owning a portfolio with at least some exposure
to many or all key market components ensures
the investor of some participation in stronger
areas while also mitigating the impact of
weaker areas.
Many investors lack the time, interest, or skills,
and can become overwhelmed by the choice of
investment options, asset classes, and other
implementation hurdles such as choosing
between index and active management.
Investors also face behavioural risks in adhering
to their investment plan over time due to
the temptation of performance chasing or
overreacting to market events.
Vanguard Diversified Funds provide
professionally managed portfolio solutions
designed to help medium to long-term
investors achieve their goals and overcome
these challenges.
Vanguard | Asset allocation report – December quarter 2022
High growth
Growth
Balanced
Conservative
Risk (Volatility)
Income Growth
Understanding Vanguard’s SAA process
For multi-asset funds, such as
Vanguard Australia’s Diversified Funds,
Vanguard’s Investment Strategy Group
(ISG) conducts an annual review of
the strategic asset allocation (SAA)
of the funds. The team considers
new asset classes, currency exposure,
home bias, regulatory and tax impact,
investment costs, investor behaviours,
and implementation factors amongst
others. The ISG team presents a
recommendation to maintain or change
the SAA to Vanguard’s global Strategic
Asset Allocation Committee (SAAC),
which oversees all of Vanguard’s multi-
asset funds. The SAAC is comprised
of senior leaders from the Investment
Management Group and Vanguard’s
advice businesses and is co-chaired
by Vanguard’s global chief economist.
Upon approval of a change to the SAA,
Vanguard assesses the feasibility, tax
impact, and costs of the recommended
changes and presents to the Board of
Vanguard Australia for approval prior to
implementing the changes.
12
The shaded boxes display the total return percentile rank of the Vanguard fund within its peer
group*, as shown by the colour code, with the number reflecting the Vanguard fund return in excess
of the peer group median return (%). The numbers below the shaded boxes indicate the number
of funds in the peer groups across each time period.

Figure 10. Vanguard Diversified Funds peer group comparison as at 31 December 2022

VANGUARD FUND
PEER GROUP
ASSET WEIGHTED PEER GROUP
PERCENTILE
MER (% P.A.) 3 MTHS 6 MTHS 1 YR 3 YRS 5 YRS 7 YRS 10 YRS

Conservative −0.06 −1.30 −3.67 −0.97 −0.01 0.25 0.59 Top 5%

0.66 51 51 50 48 43 41 39 1st quartile
2nd quartile
Balanced −0.10 −0.91 −4.34 −0.83 0.21 0.16 0.68
3rd quartile
0.80 57 57 54 49 45 39 34
4th quartile
Growth 0.09 −0.07 −1.71 −0.16 0.74 0.70 0.84
0.79 80 79 78 73 68 63 59

High Growth 0.38 0.75 −0.80 0.81 1.17 1.00 1.07

0.84 58 58 54 50 47 42 39

Sources: Vanguard, December 2022. Calculations using data from Morningstar, Inc. Past performance information is given
for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. All returns
are net of fees and assume reinvestment of income distributions. Returns greater than 12 months are annualised. There
has been no adjustment for survivorship bias.
* The peer groups were constructed by first sourcing a universe of funds from Morningstar having the same category
as the Vanguard Funds, but excluding Vanguard strategies. An automated filter was then applied to these original peer
groups with the aim of removing identified duplicate investment strategies and retain unique strategies.

Figure 11. Vanguard Diversified Funds return contributions for the quarter as at 31 December 2022

3 MONTH RETURN CONTRIBUTION (%)

3 MONTH
FUND GROSS RETURN (%) VCIF VBIF VGIF VHIF

Vanguard Cash Reserve Fund 0.79 0.1 0.0 0.0 0.0

Vanguard Australian Fixed Interest Index Fund 0.39 0.1 0.1 0.0 0.0

Vanguard Australian Shares Index Fund 9.09 1.1 1.8 2.5 3.3

Vanguard International Shares Index Fund 4.00 0.3 0.6 0.9 1.1

Vanguard International Small Companies Index Fund 5.08 0.1 0.2 0.3 0.3

Vanguard Emerging Markets Shares Index Fund 3.88 0.1 0.1 0.2 0.2

Vanguard International Shares Index Fund (Hedged) – AU Class 7.25 0.4 0.6 0.9 1.2

Vanguard Global Aggregate Bond Index Fund (Hedged) 0.61 0.3 0.2 0.1 0.0

Total return contribution (%) 2.4 3.6 4.9 6.1

Past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication
of future performance.
*F
 igures in the return contribution table are calculated as the product of the monthly gross return and the corresponding
actual asset allocation.

Vanguard | Asset allocation report – December quarter 2022 13

Connect with Vanguard™
vanguard.com.au
1300 655 205

IMPORTANT: The projections or other information generated by the VCMM regarding the likelihood of various investment outcomes are
hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Distribution of return outcomes from
the VCMM are derived from 10,000 simulations for each modelled asset class in AUD. Simulations are as of May 2022. Results from the model
may vary with each use and over time.
The VCMM projections are based on a statistical analysis of historical data. Future returns may behave differently from the historical patterns
captured in the VCMM. More importantly, the VCMM may be underestimating extreme negative scenarios unobserved in the historical period on
which the model estimation is based.
The Vanguard Capital Markets Model® is a proprietary financial simulation tool developed and maintained by Vanguard's primary investment
research and advice teams. The model forecasts distributions of future returns for a wide array of broad asset classes. Those asset classes
include U.S. and international equity markets, several maturities of the U.S. Treasury and corporate fixed income markets, international fixed
income markets, U.S. money markets, commodities, and certain alternative investment strategies. The theoretical and empirical foundation for
the Vanguard Capital Markets Model is that the returns of various asset classes reflect the compensation investors require for bearing different
types of systematic risk (beta). At the core of the model are estimates of the dynamic statistical relationship between risk factors and asset
returns, obtained from statistical analysis based on available monthly financial and economic data from as early as 1960. Using a system of
estimated equations, the model then applies a Monte Carlo simulation method to project the estimated interrelationships among risk factors
and asset classes as well as uncertainty and randomness over time. The model generates a large set of simulated outcomes for each asset class
over several time horizons. Forecasts are obtained by computing measures of central tendency in these simulations. Results produced by the tool
will vary with each use and over time.
The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to
any such funds or securities. The prospectus or the Statement of Additional Information contains a more detailed description of the limited
relationship MSCI has with Vanguard and any related funds. © 2022 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor
the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use
or distribution. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd
(ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives,
financial situation or needs. For more information refer to our Financial Services Guide (AU) or Financial Advice Provider Disclosure Statement
(NZ) at www.morningstar.com.au/s/fsg.pdf and www.morningstar.au/s/fapds.pdf. You should consider the advice in light of these matters and
if applicable, the relevant Product Disclosure Statement before making any decision to invest. Our publications, ratings and products should be
viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial
product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. The Morningstar Rating is an
assessment of a fund’s past performance – based on both return and risk – which shows how similar investments compare with their competitors.
A high rating alone is insufficient basis for an investment decision.
©2022 Bloomberg. Used with Permission. Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer
and the Operator of Vanguard Personal Investor. We have not taken yours or your clients’ objectives, financial situation or needs into account when
preparing this publication so it may not be applicable to the particular situation you are considering. You should consider yours and your clients’
objectives, financial situation or needs, and the Product Disclosure Statement (“PDS”) and the IDPS Guide (“the Guide”), before making any
investment decision or recommendation. A copy of the Target Market Determinations (TMD) for Vanguard’s financial products can be obtained
at vanguard.com.au free of charge and include a description of who the financial product is appropriate for. You should refer to the TMD before
making any investment decisions. You can access our disclosure documents at vanguard.com.au or by calling 1300 655 205. Past performance
information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. This publication
was prepared in good faith and we accept no liability for any errors or omissions.
© 2023 Vanguard Australia Investments Ltd. All rights reserved.
VAAR_012023