The broad U.S. stock market returned roughly 4% for the six months. U.S. stocks plunged on news of the referendum’s outcome but quickly reversed. Worries about the effect of Brexit on trade and global economic growth seemed to diminish as expectations increased that major central banks would be responsive to any fallout.

International stocks had a rougher time, returning about –1%. European stocks, in particular, suffered as the lead-up to the Brexit referendum and subsequent uncertainty hit closer to home. Developed Pacific markets also retreated. Emerging-market stocks were a bright spot, returning nearly 8%.

Bonds gained on global economic uncertainty

The broad U.S. bond market returned 5.31% as investors sought safe-haven assets amid questionable global economic growth, low inflation, and stock market volatility. Exceptionally low or negative yields abroad attracted foreign investors to U.S. Treasury debt. The yield of the 10-year Treasury note closed at 1.47% at the end of June, down from 2.30% at the end of December. (Bond prices and yields move in opposite directions.)

The Federal Reserve has held its target for short-term interest rates steady since raising rates by a quarter of a percentage point in December. During the period, even with the increase, the rate remained historically low and continued to curb returns for money market funds and savings accounts.

International bond markets (as measured by the Barclays Global Aggregate Index ex USD) returned 11.94%. Counter to recent trends, a number of foreign currencies strengthened against the dollar, but returns were solid even without this currency benefit.

Vanguard funds that outperformed their peer-group averages

(Periods ended June 30, 2016)

1 year

3 years

5 years

10 years

All Vanguard funds:86% (307 of 358 Vanguard funds outperformed their peers; 20,483 funds in peer category for this period)92% (306 of 332 Vanguard funds outperformed their peers; 17,314 funds in peer category for this period)91% (282 of 310 Vanguard funds outperformed their peers; 14,531 funds in peer category for this period)93% (201 of 216 Vanguard funds outperformed their peers; 8,930 funds in peer category for this period)
Money market funds:100% (10 of 10 Vanguard funds; 497 funds in peer category)100% (10 of 10 Vanguard funds; 489 funds in peer category)100% (10 of 10 Vanguard funds; 476 funds in peer category)100% (10 of 10 Vanguard funds; 397 funds in peer category)
Stock funds:81% (169 of 209 Vanguard funds; 12,084 funds in peer category)92% (183 of 200 Vanguard funds; 10,317 funds in peer category)90% (175 of 194 Vanguard funds; 8,782 funds in peer category)91% (117 of 129 Vanguard funds; 5,706 funds in peer category)
Bond funds:90% (91 of 101 Vanguard funds; 4,397 funds in peer category)91% (87 of 96 Vanguard funds; 3,689 funds in peer category)89% (72 of 81 Vanguard funds; 2,932 funds in peer category)94% (51 of 54 Vanguard funds; 1,645 funds in peer category)
Balanced funds:97% (37 of 38 Vanguard funds; 3,505 funds in peer category)100% (26 of 26 Vanguard funds; 2,819 funds in peer category)100% (25 of 25 Vanguard funds; 2,341 funds in peer category)100% (23 of 23 Vanguard funds; 1,182 funds in peer category)

Results will vary for other time periods. Only funds with a minimum 1-, 3-, 5-, or 10-year history, respectively, were included in the comparison. (Source: Lipper, a Thomson Reuters Company.) Note that the competitive performance data shown represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. 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 the most recent performance, visit our website at

All investing is subject to risk, including the possible loss of the money you invest.

Market data sources: Vanguard, based on market benchmarks. U.S. stocks represented by the Dow Jones U.S. Total Stock Market Float Adjusted Index. International stocks represented by the FTSE Global All Cap ex US Index. Bonds represented by the Barclays U.S. Aggregate Bond Index.