Vanguard Consumer Discretionary ETF
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Vanguard ®
Vanguard ® Consumer Discretionary ETF
Product Summary
Seeks to track the performance of the MSCI US Investable Market
Consumer Discretionary 25/50 Index.
Multicapitalization equity in the consumer discretionary sector.
Employs a passively managed, full-replication strategy when
possible.
If regulatory constraints prevent full replication, the fund uses a
sampling strategy to approximate the index’s key characteristics.
The fund remains fully invested.
Low expenses minimize net tracking error.
Quarterly Commentary People and Process
During the second quarter, economic activity slowed sharply and Vanguard Consumer Discretionary ETF is an exchange-traded
unemployment rates spiked across much of the globe. Investor share class of Vanguard Consumer Discretionary Index Fund,
sentiment nevertheless reversed course, possibly buoyed by very which seeks to track the investment performance of the MSCI US
accommodative monetary policy and unprecedented fiscal policy Investable Market Consumer Discretionary 25/50 Index, a
support to help contain the economic damage. benchmark of large-, mid-, and small-cap U.S. stocks in the
consumer discretionary sector, as classified under the Global
Global stocks surprised by recovering almost all the losses they Industry Classification Standard (GICS). This GICS sector is made
had registered since the pandemic began and climbing about 20% up of those manufacturing and service industries that tend to be
in U.S. dollar terms. Outside the U.S., emerging markets fared a the most sensitive to economic cycles. Its manufacturing segment
little better than developed markets. A number of U.S. stock includes the following industries: automotive, household durable
indexes posted their best quarterly performances in decades, goods, textiles and apparel, and leisure equipment. The services
returning more than 20%. segment includes hotels, restaurants and other leisure facilities,
consumer retailing, and internet and direct marketing retail
U.S. bonds returned about 3%. Global bonds’ return was slightly
companies. Whenever possible, the fund attempts to fully
higher, but some softening in the greenback meant they returned
replicate the target index, holding each stock in approximately the
slightly less on a USD-hedged basis. A greater investor appetite for
same proportion as its weighting in the index. However, the fund
risk led to an especially good performance for emerging-market
will use a sampling strategy if regulatory constraints or other
bonds.
considerations prevent it from replicating the index. Vanguard’s
The MSCI US Investable Market Consumer Discretionary 25/50 Equity Index Group uses proprietary software to implement trading
Index returned 37.78% for the quarter. The MSCI US Investable decisions that accommodate cash flows and maintain close
Market 2500 Index, which measures the U.S. stock market, correlation with index characteristics. Vanguard’s refined indexing
returned 22.26%. process, combined with low management fees and efficient
trading, has provided tight tracking net of expenses.
Amazon (+41.5%), Home Depot (+35.0%), and Tesla (+106.1%)
were the top contributors.
Vanguard Equity Index Group
Tiffany (–5.4%), Dillard’s (–29.8%), and Core-Mark Holding
(–12.2%) were among the biggest detractors.. Launched in 1975, The Vanguard Group, Malvern, Pennsylvania, is
among the world’s largest equity and fixed income managers. As
For the 12 months ended June 30, 2020, the MSCI US Investable chief investment officer, Gregory Davis, CFA, oversees
Market Consumer Discretionary 25/50 Index returned 12.88%. Vanguard’s Equity Index, Quantitative Equity, and Fixed Income
Amazon (+45.7%), Tesla (+383.2%), and Home Depot (+23.6%) Groups. Rodney Comegys, Principal and global head of Vanguard's
were the top contributors. General Motors (–32.1%), Marriott Equity Index Group, is responsible for all equity index funds. The
International (–38.2%), and McDonald’s (–8.9%) were the biggest Equity Index Group manages indexed equity portfolios covering
detractors. U.S. and international markets. It has developed sophisticated
portfolio construction methodologies and efficient trading
strategies that seek to deliver returns that are highly correlated
with target portfolio benchmarks. The group has advised Vanguard
Consumer Discretionary ETF since 2004.
Investment Manager Biographies
Michael A. Johnson. Portfolio manager. Advised the fund since
2010. Worked in investment management since 2007. B.S., B.A.,
Shippensburg University. M.B.A., Drexel University.
As of June 30, 2020Vanguard Consumer Discretionary ETF
Awais Khan, CFA. Portfolio manager. Advised the fund since 2017.
Worked in investment management since 2012. B.S., University of
North Carolina at Charlotte. B.S.B.A., University of North Carolina
at Charlotte.
Total Returns
Expense Year
Ratio Quarter to Date 1 Year 3 Years 5 Years 10 Years
Consumer Discretionary ETF (1/26/2004) 0.10%
Net Asset Value — 37.76% 5.96% 12.79% 13.46% 11.58% 17.24%
Market Price — 37.92 6.01 12.90 13.48 11.58 17.26
Consumer Discretionary Spliced Index — 37.78 6.01 12.88 13.55 11.66 17.36
The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will
fluctuate, so investors’ shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than
the performance data cited. For performance data current to the most recent month-end, visit our website at vanguard.com/performance.
Figures for periods of less than one year are cumulative returns. All other figures represent average annual returns. Performance figures include the
reinvestment of all dividends and any capital gains distributions. All returns are net of expenses.
Note: Spliced U.S. Investable Market Consumer Discretionary 25/50 Index: MSCI US Investable Market Consumer Discretionary Index through February 26,
2010; MSCI US Investable Market Consumer Discretionary 25/50 Index thereafter.
Market price returns are calculated using the midpoint between the bid and offer price at the time NAV is calculated, typically 4 p.m., Eastern time.
As of June 30, 2020Vanguard Consumer Discretionary ETF
Quarterly Returns
Year-End
Consumer Consumer
Discretionary Discretionary Assets
Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter ETF Spliced Index (Millions)
2020 -23.08% 37.76% — — — — $3,071
2019 14.79 4.39 0.70% 5.70% 27.55% 27.65% 3,101
2018 1.96 7.30 6.74 -16.31 -2.26 -2.18 2,336
2017 8.02 2.84 1.38 9.07 22.83 22.90 2,401
2016 1.61 -1.39 3.53 2.80 6.64 6.72 2,041
2015 4.80 1.51 -4.26 4.41 6.35 6.43 1,998
2014 -2.06 3.18 -0.68 8.99 9.39 9.50 1,554
2013 11.72 7.26 8.56 10.36 43.57 43.75 1,374
2012 16.84 -3.89 7.97 2.86 24.72 24.87 585
2011 4.55 3.44 -14.72 12.46 3.71 3.83 346
2010 11.96 -11.18 15.56 13.62 30.57 30.87 363
Recent Dividends and Distributions
Ex-Dividend Total
Date Income Dividend
June 23, 2020 $0.55 $0.55
March 11, 2020 0.37 0.37
December 17, 2019 0.75 0.75
September 27, 2019 0.59 0.59
June 24, 2019 0.46 0.46
March 22, 2019 0.43 0.43
December 14, 2018 0.56 0.56
September 25, 2018 0.55 0.55
June 29, 2018 0.55 0.55
March 19, 2018 0.40 0.40
December 15, 2017 0.51 0.51
September 28, 2017 0.54 0.54
Volatility Measures
R-Squared Beta
Consumer Discretionary Spliced Idx 1.00 1.00
MSCI US Investable Market 2500 Idx 0.93 1.24
R-squared and beta are calculated from trailing 36-month fund returns
relative to the associated benchmark.
As of June 30, 2020Vanguard Consumer Discretionary ETF
Fund Facts Top 10 Largest Holdings
Fund Number 0954
Ticker VCR % of
Total Net Assets
Intra-day Ticker VCR.IV
Amazon.com Inc. 22.9%
Benchmark Ticker M5US5CDI
Home Depot Inc. 8.0
CUSIP Number 92204A108
McDonald's Corp. 4.1
Assets (millions) $3,071
Tesla Inc. 3.6
Inception 1/26/2004
NIKE Inc. 3.6
Expense Ratio
(as of 12/2019) 0.10% Lowe's Cos. Inc. 3.1
Starbucks Corp. 2.6
Booking Holdings Inc. 2.0
TJX Cos. Inc. 1.8
Equity Characteristics Target Corp. 1.8
Consumer MSCI US
Discretionary IMI CD Total 53.5%
ETF 25/50 Index The holdings listed exclude any temporary cash investments and equity
Number of stocks 293 291 index products.
Median market cap $65.2 Billion $65.2 Billion
Average market cap $374.9 Billion $373.2 Billion
Price/earnings ratio 26.4x 26.4x
Price/book ratio 4.2x 4.3x
Return on equity 17.6% 17.5%
Earnings growth rate 12.7% 12.7%
Equity yield (dividend) 1.3% 1.3%
Foreign holdings 0.0% 0.0%
Short-term reserves 0.0% —
Turnover rate (fiscal year end) 9.4% —
As of June 30, 2020Vanguard Consumer Discretionary ETF
Sector Diversification (% of Stocks)
Consumer MSCI US
Discretionary IMI CD Overweight/
ETF 25/50 Index Underweight
Apparel Retail 4.2% 4.1% 0.1
Apparel, Accessories &
Luxury Goods 3.2 3.1 0.1
Auto Parts & Equipment 2.7 2.6 0.1
Automobile Manufacturers 5.7 6.6 -0.9
Automotive Retail 3.7 3.7 0.0
Casinos & Gaming 2.1 2.1 0.0
Computer & Electronics
Retail 0.8 0.7 0.1
Consumer Electronics 0.6 0.6 0.0
Department Stores 0.3 0.3 0.0
Distributors 1.1 1.1 0.0
Education Services 1.2 1.2 0.0
Footwear 4.3 4.2 0.1
General Merchandise
Stores 4.2 4.2 0.0
Home Furnishings 0.7 0.7 0.0
Home Improvement Retail 11.4 11.3 0.1
Homebuilding 3.1 3.1 0.0
Homefurnishing Retail 0.8 0.7 0.1
Hotels, Resorts & Cruise
Lines 2.9 2.8 0.1
Household Appliances 0.5 0.5 0.0
Housewares & Specialties 0.3 0.2 0.1
Internet & Direct Marketing
Retail 30.0 29.7 0.3
Leisure Facilities 0.5 0.5 0.0
Leisure Products 1.7 1.7 0.0
Motorcycle Manufacturers 0.1 0.1 0.0
Restaurants 10.8 10.7 0.1
Specialized Consumer
Services 0.8 0.8 0.0
Specialty Stores 2.1 2.1 0.0
Tires & Rubber 0.2 0.2 0.0
Total 100.0% 100.0%
Sector categories are based on the Global Industry Classification Standard
(GICS), except for the Other category (if applicable), which includes
securities that have not been provided a GICS classification as of the effective
reporting period.
As of June 30, 2020Vanguard Consumer Discretionary ETF
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