Vanguard - Learn more about alerts (2024)

Portfolio Watch indicates areas where your investments are in line with Vanguard's methodology and principles, areas where your investments vary slightly, and areas where your investments are significantly different. Alerts can also provide information that may be helpful, even though your investments are generally inline with our principles.

Alert types

Portfolio Watch provides 4 types of alerts:

If you elect to turn off your alerts, only info alerts will be appear in your analysis.

Asset allocation alerts

Alerts in your asset allocation analysis relate to your target asset allocation, short-term reserves, investments classified as "Other," or effects to your allocation from short-term changes in Vanguard Asset Allocation Fund.

Differences from your target allocation of 20% or more will receive a caution alert, differences between 10 and 19% receive a consider alert, and differences less than 10% will receive an ok alert.

If you haven't set a target allocation, short-term reserves that exceed 50% of your account group's total assets will receive a consider alert.

Outside investments that are classified as "Other" aren't included in your asset allocation analysis. Sometimes we are unable to classify outside investments. When this occurs, an info alert will invite you to provide more information on these investments so that we can include them in your analyses.

If you have investments in the Asset Allocation Fund within your account group, an info alert may inform you that differences between your actual and target allocations are being caused by short-term conditions in this fund. You should wait for the fund to resolve this. You should not try to change your other investments to compensate for a temporary change in the Asset Allocation Fund.

Stock analysis alerts

Alerts in your stock analyses will relate to your diversification in international stocks, market capitalization, growth vs. value stocks, major industry sectors, and geographic regions.

International stocks making up less than 5% or more than 25% of an account group will receive a consider alert. International stocks making up more than 30% will receive a caution alert.

Market capitalization alerts indicate how the stocks and stock funds in an account group are allocated in large-, mid-, and small-capitalization stocks. Account groups that differ from market weightings by 10-20% will be indicated by a consider alert. Account groups that differ from market weightings by more than 20% by a caution alert.

Stock style alerts indicate the stock's or stock fund's relative weightings in growth and value stocks. If value stocks are 10-15% overweighted compared to growth stocks (or vice versa) a consider alert will display. If the relative weightings differ by more than 15%, a caution alert will be shown.

Industry sector alerts will highlight any sectors where the stock portion of your account group is over- or underweighted compared to the U.S. stock market. Differences of 5–10% are indicated with a consider alert; differences greater than 10% are indicated with a caution alert. Differences of less than 5% are indicated with an ok alert.

International region alerts are indications of your account group's stock and stock fund diversification across broad geographic regions. Account groups that differ from market weightings by 10-20% will be indicated by a consider alert. Account groups that differ from market weightings by more than 20% by a caution alert. ok indicates all regions are within 10% of the benchmark's weightings.

Bond analysis alerts

Credit quality alerts are based on the proportion of your bond holdings that are invested in low-credit-quality bonds. Low-credit-quality bonds have a higher risk of default compared with higher-credit-quality bonds but provide some diversification and higher yields. Most investors should generally limit their investments in low-credit-quality bonds to no more than 10% of their bond holdings. If low-credit-quality bonds are 15% or less of an account group's bond holdings, an ok alert is shown. If a they are 15–20%, you'll see a consider alert. A caution alert is displayed whenever bonds with low credit quality are more than 20% of an account group's bond holdings.

Interest rate sensitivity alerts are based on the proportion of your account group's bond holdings invested in short-term and long-term bonds. Long-term bonds typically provide higher yields but decline more sharply in price when interest rates rise than short-term or intermediate-term bonds. Short-term bond prices react less when interest rates rise, but typically provide lower returns over the long-term. The analysis breaks down your holdings into high, medium, and low interest rate sensitivities based on the duration or average maturity for both taxable and municipal bonds. ok alerts indicate that your bond holdings are well-diversified. An consider alert indicates that you are moderately overweighted or underweighted in either long-term or short-term bonds. A caution alert is shown when your account group is significantly overweighted in long-term or short-term bonds.

Investment costs, taxes, and manager risk alerts

Cost alerts are based on the expense ratios of the account group's mutual funds compared to an industry average. A caution alert indicates that your account group's average expense ratio is over 1%. A consider alert is shown when the ratio is between 0.5% and 1%. An expense ratio less than 0.5% is considered ok.

Tax efficiency alerts help you identify opportunities to reduce the taxes you pay on your investment gains. Portfolio Watch analyzes your account group to identify tax-advantaged and tax-efficient investments like retirement accounts, tax-exempt bonds and bond funds, individual stocks, and index funds; and separates them from other investments that may or may not be tax-efficient. A consider alert indicates that 15% or more of the account group's assets represent investments that Portfolio Watch identifies as "Possible tax reduction opportunities."

Investment manager risk is determined by your account group's allocations in index mutual funds, individual stocks, and individual bonds. Vanguard believes that the core of an investor's portfolio should be invested in index funds. A consider alert indicates that the account group has less than 40% of its assets in index investments. With regard to individual stocks and bonds, a caution alert indicates that 5% or more of the account group's assets are invested in a single stock. A consider alert indicates that 10% or more of the account group's assets are invested in either individual stocks or individual bonds.