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Should You Invest in Vanguard Dividend Growth Fund (VDIGX)?
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Having trouble finding a Large Cap Blend fund? Vanguard Dividend Growth Fund (VDIGX - Free Report) is a possible starting point. VDIGX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VDIGX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
VDIGX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Dividend Growth Fd made its debut in May of 1992, and since then, VDIGX has accumulated about $32.22 billion in assets, per the most up-to-date date available. Donald J. Kilbride is the fund's current manager and has held that role since June of 2017.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.83%, and is in the middle 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 8.53% The fund's 3-year annualized total return of 8.53% places it in the middle third, a metric that will likely stand out if you prefer to look at shorter time frames.
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. Compared to the category average of 10.51%, the standard deviation of VDIGX over the past three years is 9.02%. Looking at the past 5 years, the fund's standard deviation is 8.77% compared to the category average of 9.86%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In VDIGX's case, the fund lost 37.94% in the most recent bear market and outperformed its peer group by 11.63%. This means that the fund could possibly be a better choice than its peers during a down market environment.
And for investors concerned about the potential drawdown in a really bad calendar year, we can look back to 2008 for that figure. In its worst calendar year in a decade, the fund lost over 25.57%.
Investors should note that the fund has a 5-year beta of 0.88, so it is likely going to be less volatile than the market at large. 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 negative alpha of -0.43, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 97.63% of its assets in stocks, and these companies have an average market capitalization of $120.68 billion. The fund has the heaviest exposure to the following market sectors:
Industrial Cyclical
Non-Durable
Finance
Retail Trade
Technology
With turnover at about 27%, this fund makes fewer trades than comparable funds.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VDIGX is a no load fund. It has an expense ratio of 0.28% compared to the category average of 1.03%. So, VDIGX is actually cheaper than its peers from a cost perspective.
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 Fd ( VDIGX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Don't stop here for your research on Large Cap Blend funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VDIGX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Should You Invest in Vanguard Dividend Growth Fund (VDIGX)?
Having trouble finding a Large Cap Blend fund? Vanguard Dividend Growth Fund (VDIGX - Free Report) is a possible starting point. VDIGX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VDIGX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
VDIGX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Dividend Growth Fd made its debut in May of 1992, and since then, VDIGX has accumulated about $32.22 billion in assets, per the most up-to-date date available. Donald J. Kilbride is the fund's current manager and has held that role since June of 2017.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.83%, and is in the middle 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 8.53% The fund's 3-year annualized total return of 8.53% places it in the middle third, a metric that will likely stand out if you prefer to look at shorter time frames.
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. Compared to the category average of 10.51%, the standard deviation of VDIGX over the past three years is 9.02%. Looking at the past 5 years, the fund's standard deviation is 8.77% compared to the category average of 9.86%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In VDIGX's case, the fund lost 37.94% in the most recent bear market and outperformed its peer group by 11.63%. This means that the fund could possibly be a better choice than its peers during a down market environment.
And for investors concerned about the potential drawdown in a really bad calendar year, we can look back to 2008 for that figure. In its worst calendar year in a decade, the fund lost over 25.57%.
Investors should note that the fund has a 5-year beta of 0.88, so it is likely going to be less volatile than the market at large. 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 negative alpha of -0.43, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 97.63% of its assets in stocks, and these companies have an average market capitalization of $120.68 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 27%, this fund makes fewer trades than comparable funds.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VDIGX is a no load fund. It has an expense ratio of 0.28% compared to the category average of 1.03%. So, VDIGX is actually cheaper than its peers from a cost perspective.
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 Fd ( VDIGX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Don't stop here for your research on Large Cap Blend funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VDIGX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.