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Is Vanguard Dividend Growth Fund (VDIGX) a Strong Mutual Fund Pick Right Now?
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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 holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that VDIGX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a " buy and hold " mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
VDIGX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard Dividend Growth Fund made its debut in May of 1992 and VDIGX has managed to accumulate roughly $33.68 billion in assets, as of the most recently available information. The fund's current manager, Donald J. Kilbride, has been in charge of the fund since February of 2006.
Performance
Investors naturally seek funds with strong performance. VDIGX has a 5-year annualized total return of 10.8% and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 10.18%, which places it in the middle 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 9.36%, compared to the category average of 10.58%. The standard deviation of the fund over the past 5 years is 9.1% compared to the category average of 10.32%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, VDIGX lost 37.94% and underperformed its peer group by 11.73%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.89, which means it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. VDIGX has generated a negative alpha over the past five years of -0.82, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VDIGX is a no load fund. It has an expense ratio of 0.26% compared to the category average of 1%. VDIGX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Dividend Growth Fund 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.
This could just be the start of your research on VDIGX in the Large Cap Blend category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Vanguard Dividend Growth Fund (VDIGX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Large Cap Blend fund? Vanguard Dividend Growth Fund (VDIGX - Free Report) is a possible starting point. VDIGX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that VDIGX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a " buy and hold " mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
VDIGX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard Dividend Growth Fund made its debut in May of 1992 and VDIGX has managed to accumulate roughly $33.68 billion in assets, as of the most recently available information. The fund's current manager, Donald J. Kilbride, has been in charge of the fund since February of 2006.
Performance
Investors naturally seek funds with strong performance. VDIGX has a 5-year annualized total return of 10.8% and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 10.18%, which places it in the middle 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 9.36%, compared to the category average of 10.58%. The standard deviation of the fund over the past 5 years is 9.1% compared to the category average of 10.32%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, VDIGX lost 37.94% and underperformed its peer group by 11.73%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.89, which means it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. VDIGX has generated a negative alpha over the past five years of -0.82, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VDIGX is a no load fund. It has an expense ratio of 0.26% compared to the category average of 1%. VDIGX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Dividend Growth Fund 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.
This could just be the start of your research on VDIGX in the Large Cap Blend category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.