Plan Investing: Vanguard Auto-Balanced Funds Info

Dechert-Hampe & Company Employees Savings and Profit Sharing Plan

The set of Vanguard Auto-Balanced Funds mutual funds is actually composed of two sets of Vanguard Funds which you can read about directly from Vanguard's website at the following links:

• Vanguard Target Retirement Funds: This is the link to Vanguard's proprietary description of one of its families of "All-in-One" funds. These Target Retirement Funds are a set of individual funds that are broadly diversified within themselves and that gradually become more conservative as your year of retirement approaches, reducing risk automatically. This web page helps you decide which one of these funds may be right for your Plan portfolio.
• Vanguard LifeStrategy®: Funds: Vanguard's proprietary description of another of its family of "All-in-One" funds. Each of the four LifeStrategy® Funds maintain its growth- or income-oriented asset mix; you never have to rebalance to keep your strategy on track. Additionally, each fund is broadly diversified within itself. This web page helps you decide which one of these funds may be right for your Plan portfolio.

Each fund of these set of Vanguard All-in-One funds are automatically and regularly (generally each quarter) re-balanced to its strategic allocation of the Vanguard indexed funds that comprise its portfolio. The general strategic process employed and the actual Vanguard Funds comprising each of these Vanguard product lines are as follows:

• Vanguard Target Retirement Funds: The current 10 funds comprising this product line are set up to simulate a “Glide Path” to retirement. That is, the funds with the most distant dates (eg. 2040 thru 2060) are structured with the most aggressive allocation to stocks - between 80% and 90% exposure. Those with closer-in dates (eg. 2020 and 2025) adhere to more conservative allocations; stock exposure is in the 40% to 50% range for these two funds with the 2020 variant currently hosting 41% in stocks.

  The "Glide Path" is relatively constant, meaning that changes occur slowly and steadily over time. For example, the stock allocation of the 2060 fund will change from approximately 90% initially to around 40% in about 2060 – a change of 50 percentage points over a period of about 35 years or by just over 1.5 percentage points a year on average.

  Vanguard Target Retirement Funds all follow the "Glide Path" as outlined in the prospectus. You can download the prospectus for each fund in the Table below.

  Finally, consistent with the “Glide Path” methodology, each Target Retirement Fund merges into the Target Retirement Income Fund seven years after the target date. For example, the 2015 Target Retirement Fund was merged into the Target Retirement Income Fund in 2022. Operating expense ratios for all the Target Retirement Funds are 0.08% annually. The Vanguard funds comprising the Target Retirement Funds are:

  • Short-Term Inflation Protected Securities Index Fund
  • Total Bond Market II Index Fund
  • Total International Bond II Fund
  • Total International Bond Index Fund
  • Total Stock Market Index Fund
  • Total International Stock Index Fund

• Vanguard LifeStrategy®: Funds: The 4 funds representing this product line are automatically re-balanced each quarter by Vanguard to maintain a relatively narrow band of asset allocation appropriate to the risk/return profiles described by their names. Each fund allocates its assets among bonds and stocks in proportions consistent with its advisor’s evaluation of their expected risks and returns. These proportions are changed from time to time as expectations shift. As a result, the LifeStrategy® Funds can vary stock allocations within a 0% to 25% band making accurate market timing a definite requirement for the Funds’ long term success. The second Table below depicts asset allocations in these Funds as of June 30, 2022. More timely data is available in the Quarterly Fund Fact Sheets accessible in the first Table below. Operating expense ratios for all the LifeStrategy® Funds range from 0.11% to 0.14% annually. The Vanguard Funds composing the LifeStrategy® Funds are:

  • Total Bond Market II Index Fund
  • Total International Bond II Fund
  • Total International Bond Index Fund
  • Total Stock Market Index Fund
  • Total International Stock Index Fund

Current Prospectus, the most recent Fund Financial Reports, and Fund Fact Sheets, all published by Vanguard Funds, should be downloaded and reviewed before making any investment.

Morningstar© Mutual Funds "Quick-Take" independently published reports for each fund are also available with a click!

To aid you in understanding the actual risk/return profiles associate with each of the Vanguard Auto-Balanced funds available through the Plan, we have detailed each fund’s recent (6/30/2022) allocation to major asset classes of money markets, bonds, and stocks in the Table below. It is particularly important to note that even the close-in Target Retirement variants maintain significant allocations to stocks and can therefore result in relatively volatile performance in years very close to the portfolios target maturity. Remember, only you (or your professional financial advisor) can determine the mix appropriate to your investing objectives.