Vanguard Dividend Growth Fund Review (VDIGX)

This is our Vanguard Dividend Growth Fund Review (VDIGX).  When you’re looking to generate income within your stock portfolio it can seem challenging especially since bonds are paying very low interest rates currently.  One solution to this is to purchase stocks – stocks that pay dividends – stocks that are growing.

We have not found a better fund for dividend growth investing than the Vanguard Dividend Growth Fund (VDIGX).  This fund from Vanguard meets the criteria we were looking for to fill the income void in our portfolio, yet not be filled with stocks from companies that are flat-lining.  This fund seeks to provide a growing stream of income over time and also long-term capital appreciation (rising stock prices).  The fund invests primarily in stocks that are currently paying a dividend.

VDIGX focuses on larger companies that still have potential for growing earnings and a track-record of increasing dividends over time.  Usually the stocks will be large-cap, undervalued and across industry sectors.  Such stock selections typically prove to be relatively stable, sound businesses and a recipe for success.

Vanguard dividend growth fund fees

As with most of Vanguard mutual funds, the fees on the VDIGX are extremely low.  The last time we checked-in the fees were only .31% – this is extremely low and offers room for growth of capital as all of your gains are not being eaten up by fees associated with your account.

Vanguard dividend growth fund Morningstar rating

The VDIGX is currently rated 4-star gold on Morningstar.  This is a very high rating and the mark of a great mutual fund.

Vanguard Dividend Growth Fund Review Highlights

  • VDIGX seeks to provide a growing stream of income over time
  • VDIGX seeks to provide long-term capital appreciation and current income
  • VDIGX invests primarily in stocks that tend to offer current dividends
  • VDIGX focuses on high-quality companies that have prospects for long-term total returns
  • VDIGX looks for companies that have an ability to grow earnings
  • VDIGX looks for company’s willingness to increase dividends over time
  • VDIGX diversifies over all sectors

Vanguard Dividend Growth Fund Management

As of 2014, the VDIGX has been managed by Donald Kilbride since 2006.  This is important as a manager with a long tenure in a fund shows maturity and a fund that is focused.  When a fund has a very high manager turnover, it is a sign of risk.