Vanguard Dividend Growth Fund (VDIGX)

While known for its index funds, Vanguard offers actively managed mutual funds. One of the top rated actively managed Vanguard fund is Vanguard Dividend Growth fund. This fund provides high dividend and has low expense ratio. Details of the review can be found below.

Vanguard Dividend Growth Inv (VDIGX)

The Vanguard Dividend Growth fund seeks to provide a growing stream of income over time and, secondarily, to provide long-term capital appreciation and current income. This Vanguard fund invests primarily in dividend stocks or equities. The VDIGX fund invests on high-quality companies that have prospects for long-term total returns as a result of their ability to grow earnings and their willingness to increase dividends over time. These stocks typically will be large-cap, will be undervalued relative to the market, and will show potential for increasing dividends. The fund will be diversified across industry sectors.

VDIGX Fund Details

Vanguard Dividend Growth fund details

• Fund Inception Date: May 1992
• Ticker Symbol: VDIGX (Investor Class)
• CUSIP: 921908604
• Beta (3yr): 0.80
• Expense Ratio: 0.34%
• Sales Load: 0%
• Net Assets: $5.83 billion
• Rank in category (YTD): 18
• Category: Large Blend
• Type: Large Cap Stock Fund
• Yield: 1.74%
• Capital Gains: N/A
• Number of Years Up: 13 years
• Number of Years Down: 5 years

updated 6/23/2011

Donald J. Killbride has been this fund manager since February 2006. The fund inception date was on May 1992. The minimum balance to invest in this large blend fund is $3,000 for either brokerage or IRA account with $100 minimum subsequent investment. There is no management fee and no sales load fee. The fund has 0.34% expense ratio rate, which is much lower than the average in the category (1.14%). It also large net assets of $5.83 billion.

VDIGX has returned 25.24% over the past one year and 6.19% over the past 5 years. During its 13 years of positive return, the highest fund performance was achieved in 2003 with 29.20%. And the lowest return so far was in 2008 with -25.57%. Morningstar has rated this fund with 5 stars rating.

This Vanguard fund can be purchased from 81 brokerages include JP Morgan, T Rowe Price, DATALynx, Fidelity Retail Funds Network, Schwab Retail, Ameriprise Brokerage, Federated Trust Connect, Firstrade, Sun Life CPS, Standard Retirement Services Inc, etc. There is no other class of this fund.

The top 10 largest holdings of this fund as of May 2011 are Automatic Data Processing Inc, Exxon Mobil Corp, Pepsi Co Inc, Cardinal Health Inc, Sysco Corp, Johnson & Johnson, Medtronic Inc, International Business Machines Corp, Western Union Co and BG Group PLC. These ten holdings equal to 28.0% of the net assets. The sector weightings of VDIGX include Health Care (16.6%), Consumer Staples (15.6%), Industrials (15.3%), Information Technology (15.1%) and Energy (12.3%). This fund has 57 stocks in its holding.

Disclosure: No Position

Other large cap domestic stock funds:

• Fidelity Contrafund (FCNTX)
• PRIMECAP Odyssey Growth (POGRX)