Vanguard Dividend Appreciation Index Fund

[ats5g]

Vanguard Dividend Appreciation Index Fund

Quote:

Additionally, Vanguard filed a registration statement with the SEC today, February 1, 2006, to offer a new equity index fund: Vanguard Dividend Appreciation Index Fund. This filing will replace our Vanguard Dividend Achievers Index Fund filing and is expected to become effective after a 75-day SEC review period. The new fund will offer both traditional Investor Shares and exchange-traded VIPER® Shares. Vanguard Quantitative Equity Group will manage the Dividend Appreciation Index Fund, which will seek to provide long-term growth of capital and income. The fund's target benchmark will be the Dividend Achievers Select Index, a market-capitalization weighted index with a consistent history of increasing dividends.

Prospectus [not much info in there either]

Finally, eh?

- Alec

[cute fuzzy bunny]

So they gave up on the mergent branding...

Then as far as most people will be concerned, just another value fund. They already have a pack of those.

Bummer.

[justin]

Dunno. Sounds like the underlying index may still be the same:

Dividend Achievers Select Index

Maybe they didn't want to pay for using the Dividend achievers name in their fund name.

[retire@40]

Well, they ended up doing what I said here http://early-retirement.org/forums/i...p?topic=5639.0

Ok, "Appreciation" wasn't one of the words I picked, but I like my wordage better anyway.* I would have called it the Vanguard High Dividend Attainment Fund, but I guess the brains at Vanguard are smarter than I am.

No matter what they call it, I'm sure it's going to be the same kind of fund the Achievers fund would have been.* It's just a name.

[cute fuzzy bunny]

Like I said before...you call it the 'mergent dividend achievers fund' and all the folks who like that investment strategy consider putting their money into it and forgetting about the books and trades.

You call it the dividend appreciation fund and the same people that were buying the other value funds decide whether to buy this fund instead.

I dont think you pick up incremental business. I also dont think you get a strong fund inflow.

I guess the easiest way to explain it is to ask a question...why do you think the average investor would buy this vs one of the other value funds with a long track record at vanguard (or elsewhere)?

[ats5g]

Hey (CFB):

The portfolios for PEY and DVY look a lot more like the portfolio of DFA's LV fund, and not VEIPX or VIVAX. The windsor funds also have similar market caps and p/b ratios as the large value indices.

The dividend acheivers funds/etfs look to be more midcap, like DFA's LV fund, than large cap like Vanguard's existing funds. Which could also be part of the reason for the vast outperformance of the Dividend ETFs when looking at trailing returns over 3 years [i.e. midcap value vastly outperformed LCV].

It'll be interesting to see the makeup of Vanguard's new index fund [LC or MC] since it appears that Mergent is creating an index specifically for Vanguard, much like MSCI did with Vanguard's EM fund. Since Vanguard doesn't have a midcap value index fund, this could be a way for investors to backdoor into one. :

- Alec