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News

Fund Spotlight: Vanguard Dividend Appreciation Fund (VDAIX)



Inside the Vanguard Dividend Appreciation Index Fund


The investment thesis behind VDAIX is quite simple: companies with solid track records of increasing dividends are typically larger and more stable companies that have the means to continuously return and grow shareholder value via dividends. It is important to note, however, that the yields offered by these companies may not seem that attractive – but remember that a stock with a high yield may in fact be a dividend value trap instead of a sound investment.


Under the Hood


As of 6/1/2015, VDAIX’s top holdings included:

  • Microsoft (MSFT) – 4.5%
  • International Business Machines (IBM) – 4.0%
  • Johnson & Johnson (JNJ) – 3.9%
  • Coca-Cola (KO) – 3.8%
  • Procter & Gamble (PG) – 3.8%


How to Use VDAIX


Another great feature of VDAIX is that it only charges an expense ratio of 0.20% with a minimum investment of $3,000. The Vanguard Dividend Appreciation Index Fund Admiral Shares (VDADX) is another option – it charges 0.10% with a minimum investment of $10,000.

Before making any investment decisions, be sure to take a close look under the hood of each prospective investment to make sure the fund is appropriate for your unique risk/return profile.

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Disclosure: No positions at time of writing.

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