ETF Research Center

Vanguard Materials ETF seeks to track the performance of the MSCI US Investable Market Materials Index.

FUND BASICS
Category	US Equities
Fund Sponsor	Vanguard Group Inc/The
Website	www.vanguard.com
Inception date	Jan 30, 2004
Assets (mns)	$1,972
Currency	USD
Expense ratio	10 bp
Distributions	Quarterly

FUND STRUCTURE
Regulation	Open-Ended Fund
Custodian	Brown Brothers Harriman & Co
Weighting	Market Cap
Index replication	Full
Uses derivatives	No
Options available	Yes

SECTOR BREAKDOWN

CONSTITUENT BREAKDOWN
No. of constituents	118
Wgt avg mkt cap (mns)	$30,619
Large cap (>$10bn)	72.6%
Mid cap ($2-10bn)	23.5%
Small cap (<$2bn)	4.0%
Developed mkts	100.0%
Emerging mkts	0.0%

TOP TEN HOLDINGS
Total	50.1 %
PRAXAIR INC	11.9 %
DOW CHEMICAL	5.8 %
AIR PRODUCTS & CHEMICALS INC	5.6 %
ECOLAB INC	5.4 %
SHERWIN-WILLIAMS CO/THE	5.2 %
DOW, INC.	4.5 %
PPG INDUSTRIES INC	3.3 %
NEWMONT MINING CORP	3.3 %
LYONDELLBASELL INDU-CL A	2.8 %
BALL CORP	2.2 %

TOP COUNTRY EXPOSURE
	UNITED STATES	81.9 %
	BRITAIN	16.5 %

HISTORICAL PERFORMANCE info

	Custom date range	Compare to
	thru

Standardized Annual Returns (thru October 31)
Year-to-date	1 year	5 years	10 years	Since Incep.
16.2%	10.7%	5.5%	10.0%	8.2%

Market Correlations
versus...	Beta	R-squared
S&P500	1.15	79%
MSCI EAFE	1.06	57%
MSCI Emg. Mkts.	0.75	47%

Technical Indicators
Recent close	$131.93
30d moving avg.	$126.14
Annualized volatility	15.6%
Short interest (ETF)	0.1%
Short interest (Underlying)	3.5%
Relative strength (RSI)	67

Liquidity measures
Avg. volume (thou.)	38
Turnover	0.3%
Bid/Ask (% of price)	0.06%
ADV underlying (mns)	$5,425

Distributions

FINDING ALTERNATIVE FUNDS

Below is a list of 20 potential alternatives to the Vanguard Materials ETF based on the alternatives' overlap in portfolio holdings with VAW. Consider funds with lower expense ratios and/or higher ALTAR Score™ ratings as possible alternatives.

Benchmark ticker:

VAW

Expense:

10 bp

ALTAR Score™:

8.6%

ALTERNATIVE ETFs BASED ON OVERLAP WITH VAW
Ticker	Fund Name	Overlap¹ vs VAW (%)	Expense ratio (bp)	Savings vs VAW (bp)	ALTAR Score™ (%)	ALTAR vs VAW (%)
FMAT	Fidelity MSCI Materials	98.3	8	2	8.6	+0.0
XLB	Materials Select Sector SPDR	75.8	13	-3	9.2	+0.6
IYM	iShares DJ US Basic Material	68.9	42	-32	8.5	-0.0
JHMA	John Hancock Multifactor Materials	68.0	40	-30	7.5	-1.1
RTM	Invesco S&P Equal Weight Materials	57.6	40	-30	8.4	-0.2
FXZ	First Trust Materials Alphadex	37.9	64	-54	8.0	-0.6
PYZ	Invesco Dynamic Basic Materials Sector	37.3	60	-50	5.9	-2.7
MXI	iShares S&P Global Materials	36.2	46	-36	6.8	-1.8
XLSY	Cushing Energy Supply Chain & MLP	30.2	65	-55	5.5	-3.1
SZNE	Pacer CFRA-Stovall Equal Weight Seasonal Rotation	24.7	60	-50	6.7	-1.9
FTAG	First Trust Indxx Global Agriculture	16.3	70	-60	8.2	-0.3
IGE	iShares North American Natural Resources	13.9	46	-36	4.0	-4.5
EQRR	ProShares Equities for Rising Rates	13.8	35	-25	8.0	-0.6
XME	SPDR Metals & Mining ETF	12.5	35	-25	2.6	-5.9
TPHD	Timothy Plan High Dividend Stock	12.1	52	-42	6.7	-1.9
GNR	SPDR S&P Global Nat. Resources	11.5	40	-30	6.5	-2.1
PAVE	Global X U.S. Infrastructure Development	11.3	47	-37	5.7	-2.9
YLDE	ClearBridge Dividend Strategy ESG	11.0	60	-50	4.7	-3.9
KNG	Cboe Vest S&P 500 Dividend Aristocrats Target Income	10.7	75	-65	5.4	-3.1
NOBL	ProShares S&P500 Aristocrats	10.7	35	-25	5.8	-2.8

¹Overlap is the percentage of holdings by weight that are identical. For example, if Fund A has a 2% position in Apple, Inc. (AAPL) and Fund B has a 5% position, their overlapping position in AAPL is 2%.

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RESULTS & ESTIMATES

	2014	2015	2016	2017	2018	2019E	2020E
Sales per share	**	**	**	**	**	**	**
Earnings per share	**	**	**	**	**	**	**
Dividends per share	**	**	**	**	**	**	**
Book value per share	**	**	**	**	**	**	**

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

OTHER FUNDAMENTAL METRICS

Long term EPS growth est.	**%		Debt-to-equity	**x
Asset turnover	**%		Assets-to-equity	**x

Return on equity

Revision activity*

*Six months ago = 100

Net margins

Compound annual growth rates

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VALUATION METRICS

	2018	2019E	2020E
Price-to-sales	**	**	**
Price-to-earnings	**	**	**
Price-to-cash flow	**	**	**
Price-to-growth	**	**	**
Price-to-book value	**	**	**
Yield	**	**	**

Historical valuation trends

Forward multiple:	Vanguard Materials
Relative to:	S&P500	MSCI EAFE	MSCI Emg. Mkts.	Other ETF:

SPECULATIVE

Deeply undervalued but risky. A rating of SPECULATIVE is assigned to ETFs with ALTAR Scores in the top quintile (the top 20%) of their category, indicating exceptional appreciation potential. However, often these are narrowly-focused funds or in industries with structural issues, which may also make them very risky. Nonetheless they may still be useful as part of a well-diversified portfolio.

ALTAR Score™

Calculation of ALTAR Score™
Avg. Return on Equity	14.9	%
Divided by: Fwd. P/BV	1.7	x
Less: Expense ratio	10	bp
Equals: ALTAR Score	8.6	%

More information on ALTAR Score™

MODERN PORTFOLIO THEORY info

CONSENSUS RECOMMENDATIONS: FUND CONSTITUENTS

COMPOSITE RATING	1.59	CATEGORY AVERAGE	1.55

The composite rating is a weighted average of analysts' consensus recommendations for individual ETF constituents, based on the following scale: BUY = 1; OVERWEIGHT = 1.5, HOLD = 2; UNDERWEIGHT = 2.5; and SELL = 3. Readers are cautioned that because analyst ratings tend to be inflated, the composite score may be more useful as a relative measure of sentiment between funds rather than as a stand-alone recommendation.