@ESRwannabe, your first sentence intrigued me, so I looked at your linked page and at the current fund prospectus.
From the linked page I would say that this fund is not doing too badly. For 10 years TR is is 50bps below its Morningstar benchmark. This is a pretty squishy benchmark, though, because the "Morningstar Moderate Target Risk" category is going to include funds with varying allocations between equities and income investments. The 50bps underrun may simply be due to VPGDX holding a little higher % of fixed income than the benchmark average. (This is why I avoid balanced and target date funds BTW; they are nearly impossible to accurately benchmark.) So ... If I were an investor looking at your linked chart, I would not be upset.
A couple of things here: First, VPGDX is a stock-picking fund, not an index fund. From the prospectus: "The advisor uses quantitative analysis and professional judgment in an attempt to combine complementary asset classes and investments across the risk/reward spectrum. The exact proportion of each asset class or investment may be changed to reflect shifts in the advisor’s risk and return expectations." Basically they are trying to pick winning sectors by allocating the equity side to various Vanguard funds. There is solid statistical evidence that this rarely works.
Re retiring off index funds, if history is any guide, over a 10 year period a passive investor's results will beat well over 90% of stock-picking funds' results. So unless you are lucky enough to pick the roughly 5% +/- of funds that outperform, you are in far better retirement shape with passive investments than you would be with the stock pickers. (Ref multiple S&P SPIVA reports). Further, there is no way to know in advance which stock pickers will be the lucky ones during the period. Past performance is not predictive. (Ref multiple S&P Manager Persistence reports).
Finally, comparing VPGDX with the TR of some other asset class is really not very useful. I will bet that for any investment you have, over any period you name, there will be some other investment that does better. Sorry. Life is like that.