ETF Research Center

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

FUND BASICS
Category	US Equities
Fund Sponsor	Vanguard Group Inc/The
Website	www.vanguard.com
Inception date	Jan 30, 2004
Assets (mns)	$10,284
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	397
Wgt avg mkt cap (mns)	$127,546
Large cap (>$10bn)	87.4%
Mid cap ($2-10bn)	8.4%
Small cap (<$2bn)	4.2%
Developed mkts	100.0%
Emerging mkts	0.0%

TOP TEN HOLDINGS
Total	43.0 %
JOHNSON & JOHNSON	8.5 %
UNITEDHEALTH GROUP INC	6.1 %
MERCK & CO. INC.	5.1 %
PFIZER INC	4.8 %
MEDTRONIC PLC	3.5 %
ABBOTT LABORATORIES	3.4 %
AMGEN INC	3.1 %
THERMO FISHER SCIENTIFIC INC	2.9 %
ABBVIE INC	2.8 %
BRISTOL-MYERS SQUIBB CO	2.7 %

TOP COUNTRY EXPOSURE
	UNITED STATES	92.4 %
	IRELAND	5.7 %
	BRITAIN	0.5 %
	NETHERLANDS	0.1 %
	SWITZERLAND	0.0 %
	CAYMAN ISLANDS	0.0 %
	CANADA	0.0 %
	PUERTO RICO	0.0 %
	COSTA RICA	0.0 %
	BERMUDA	0.0 %

HISTORICAL PERFORMANCE info

	Custom date range	Compare to
	thru

Standardized Annual Returns (thru December 31)
Year-to-date	1 year	5 years	10 years	Since Incep.
21.9%	21.9%	10.5%	15.2%	10.4%

Market Correlations
versus...	Beta	R-squared
S&P500	0.91	67%
MSCI EAFE	0.80	43%
MSCI Emg. Mkts.	0.57	37%

Technical Indicators
Recent close	$196.84
30d moving avg.	$191.02
Annualized volatility	13.5%
Short interest (ETF)	1.8%
Short interest (Underlying)	2.9%
Relative strength (RSI)	74

Liquidity measures
Avg. volume (thou.)	168
Turnover	0.3%
Bid/Ask (% of price)	0.04%
ADV underlying (mns)	$28,122

Distributions

FINDING ALTERNATIVE FUNDS

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

Benchmark ticker:

VHT

Expense:

10 bp

ALTAR Score™:

5.5%

ALTERNATIVE ETFs BASED ON OVERLAP WITH VHT
Ticker	Fund Name	Overlap¹ vs VHT (%)	Expense ratio (bp)	Savings vs VHT (bp)	ALTAR Score™ (%)	ALTAR vs VHT (%)
FHLC	Fidelity MSCI Health Care	98.1	8	2	5.5	-0.1
IYH	iShares US Healthcare	90.8	43	-33	5.9	+0.4
XLV	Health Care Select Sector SPDR	84.1	13	-3	6.8	+1.3
JHMH	John Hancock Multifactor Health Care	77.3	40	-30	6.3	+0.8
IXJ	iShares S&P Global Healthcare	67.8	46	-36	6.0	+0.5
IEHS	iShares Evolved U.S. Healthcare Staples	57.5	18	-8	5.6	+0.0
RYH	Invesco S&P Equal Weight Healthcare	55.1	40	-30	6.7	+1.1
IEIH	iShares Evolved U.S. Innovative Healthcare	50.6	18	-8	3.8	-1.8
FXH	First Trust Health Care Alphadex	40.1	63	-53	6.7	+1.1
PBE	Invesco Dynamic Biotechnology & Genome	34.8	57	-47	10.5	+5.0
PJP	Invesco Dynamic Pharmaceuticals	34.8	56	-46	10.5	+4.9
FTXH	First Trust Nasdaq Pharmaceuticals	33.0	60	-50	4.1	-1.4
GDNA	Goldman Sachs Motif Human Evolution	29.3	50	-40	1.0	-4.5
IHE	iShares DJ US Pharmaceuticals	28.2	42	-32	4.9	-0.6
LNGR	Global X Longevity Thematic	26.9	50	-40	3.2	-2.3
IHI	iShares DJ US Medical Devices	26.4	43	-33	3.6	-1.9
PPH	VanEck Vectors Pharmaceuticals	26.2	36	-26	8.9	+3.3
DURA	VanEck Vectors Morningstar Durable Dividend	24.4	29	-19	6.5	+1.0
HLAL	Wahed FTSE USA Shariah	23.7	50	-40	5.3	-0.3
SPHQ	Invesco S&P 500 Quality	22.9	15	-5	5.4	-0.2

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 Health Care
Relative to:	S&P500	MSCI EAFE	MSCI Emg. Mkts.	Other ETF:

NEUTRAL

Average appreciation potential. A rating of NEUTRAL is assigned to ETFs with ALTAR Scores in the middle quintile (ranking between 40%-60%) of their category. This indicates that valuations adequately reflect the fundamentals of stocks in these funds.

ALTAR Score™

Calculation of ALTAR Score™
Avg. Return on Equity	19.7	%
Divided by: Fwd. P/BV	3.5	x
Less: Expense ratio	10	bp
Equals: ALTAR Score	5.5	%

More information on ALTAR Score™

MODERN PORTFOLIO THEORY info

CONSENSUS RECOMMENDATIONS: FUND CONSTITUENTS

COMPOSITE RATING	1.39	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.