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Vanguard dividend appreciation fund
Old 02-26-2007, 09:14 AM   #1
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Vanguard dividend appreciation fund

Is anyone else disappointed in this fund? I was looking forward to its launch. 1.38% yield for the fund and 1.5% for the etf. Am I missing something or is that an awfully low yield for a dividend based stock fund?
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Re: Vanguard dividend appreciation fund
Old 02-26-2007, 09:47 AM   #2
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Re: Vanguard dividend appreciation fund

Disappointed? -- yes indeed ,although there were a lot of posts on the Diehards forum which I should have taken to heart. I have been in Vanguard Equity Income Fund (VEIPX) and it has done well with a higher yield. I'll be bailing out once i have held it a year.
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Re: Vanguard dividend appreciation fund
Old 02-26-2007, 10:42 AM   #3
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Re: Vanguard dividend appreciation fund

IIRC, the Dividend Achievers Select Index is basically dividend paying companies that increased their annual regular dividends for at least the past 10 consecutive years and have met specific liquidity screening criteria.

Mergent’s Dividend Achievers Index Serves As Benchmark for a New Vanguard Fund

Fund Alarm commentary on VDAIX

New Vanguard Fund an Overachiever?

So, VDAIX is not a high dividend fund like DVY or VEIPX. I think I'll pass on this one. Give me VIVAX anyday.

- Alec
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Re: Vanguard dividend appreciation fund
Old 02-26-2007, 10:44 AM   #4
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Re: Vanguard dividend appreciation fund

Quote:
Originally Posted by Cute Fuzzy Bunny
Is anyone else disappointed in this fund? I was looking forward to its launch. 1.38% yield for the fund and 1.5% for the etf. Am I missing something or is that an awfully low yield for a dividend based stock fund?
I would say its low. They will probably justify it by being more diverse than say DVY. For me I'll take DVY and the higher yield. I'm not worried about having to sell.
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Re: Vanguard dividend appreciation fund
Old 02-26-2007, 11:17 AM   #5
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Re: Vanguard dividend appreciation fund

Alas - it looks as if Vanguard has fallen prey to feeding the ducks. 212 holdings - yikes - looks like close to the whole list - ie the good, the bad, and the ugly. Memory says it ran between 200-300 stocks in the years I used to buy Mergent's Handbook.

Sigh - these things happen - Bogle has admitted Wellington had a go-go stock phase before the got back to basics in the 70's.

heh heh heh - I'm in there myself - looking for 'the big one' growth wise now that current divs are in season - hit where they ain't and all that rot. I noticed Buffett has backed off a tad on Budweiser and a hold on G.E. Then there is Wal Mart. Still looking.
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Re: Vanguard dividend appreciation fund
Old 02-28-2007, 08:32 AM   #6
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Re: Vanguard dividend appreciation fund

I've noticed this with "value" funds, too. What kind of "value" fund pays the same dividend as a "blend" fund?
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Re: Vanguard dividend appreciation fund
Old 02-28-2007, 11:06 AM   #7
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Re: Vanguard dividend appreciation fund

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Originally Posted by HFWR
I've noticed this with "value" funds, too. What kind of "value" fund pays the same dividend as a "blend" fund?
The kind that includes value stocks that don't pay dividends. It isn't a pre-requisite that a value stock pay a dividend. IIRC, the dividend yield DFA's large value fund [DFLVX] is lower than Vanguard's TSM fund.

I like to think of it this way:

1) value stocks are a subset of all the stocks out there; and

2) high yielding dividend paying stocks are a subset of value stocks.

In any case, I wouldn't consider Vanguard's new fund, VDAIX either a value fund or a high dividend paying fund [like VEIPX or DVY]. It's simply a fund that only holds stocks of those companies that have increased their dividends for the past 10 consecutive years, which just happens to land it in the large blend category. Note that the index VDAIX follows does not say anything about a screen for high dividend yielding stocks.

- Alec
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