If investors are looking at the Mutual Fund Equity Report fund category, Vanguard Dividend Growth Fund (VDIGX Quick QuoteVDIGX - Free Report) could be a potential option. VDIGX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

Vanguard Group is responsible for VDIGX, and the company is based out of Malvern, PA. Vanguard Dividend Growth Fund made its debut in May of 1992, and since then, VDIGX has accumulated about $53.06 billion in assets, per the most up-to-date date available. The fund's current manager, Donald J. Kilbride, has been in charge of the fund since February of 2006.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 13.04%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.74%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, VDIGX's standard deviation comes in at 16.15%, compared to the category average of 18.9%. The standard deviation of the fund over the past 5 years is 14.59% compared to the category average of 17.24%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.79, the fund is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. VDIGX's 5-year performance has produced a positive alpha of 2.49, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is principally on equities that are traded in the United States.

As of the last filing date, the mutual fund has 88.7% of its assets in stocks, with an average market capitalization of $235.67 billion. The fund has the heaviest exposure to the following market sectors:

1. Non-Durable
2. Technology
3. Industrial Cyclical
4. Finance
5. Health

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VDIGX is a no load fund. It has an expense ratio of 0.27% compared to the category average of 0.92%. VDIGX is actually cheaper than its peers when you consider factors like cost.

This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.

Bottom Line

Overall, Vanguard Dividend Growth Fund ( VDIGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.