If you have been following me for some time now, you know that I often suggest investors build up a core index portfolio before taking on dividend investing through individual dividend growth stocks. One way to look at that core portfolio is to consider Vanguard‘s extensive lineup of dividend orientated funds.[ad#tdg-embedded]
Vanguard is best known for their low cost indexing approach to investing. Personally, I hold Vanguard Emerging Markets Stock ETF, the Vanguard REIT Index ETF , the Vanguard Value VIPERs, and the Vanguard Small-Cap Value ETF. I have been furthering my research into their dividend focused funds and can offer the following summary of the funds that have available with a dividend based focus.
Vanguard Dividend Appreciation ETF (VIG)
Vanguard Dividend Appreciation ETF seeks to track the performance of a benchmark index that measures the investment return of common stocks of companies that have a record of increasing dividends over time. 0.24% MER.
Vanguard High Dividend Yield ETF (VYM)
Vanguard High Dividend Yield ETF seeks to track the performance of a benchmark index that measures the investment return of common stocks of companies that are characterized by high dividend yields. 0.20% MER.
Vanguard Wellesley Income Fund Investor Shares (VWINX)
Balanced fund of roughly two-thirds high-quality bonds, one-third dividend-paying stocks. Has typically offered higher income than most other Vanguard balanced funds, with moderate movements in share value. 0.31% MER.
Vanguard Dividend Growth Fund (VDIGX)
Seeks a growing stream of income and long-term growth of capital. Invests primarily in large-capitalization stocks with a history of paying stable or increasing dividends from all industry sectors. Follows a value-oriented strategy in selecting stocks that the advisor believes to be undervalued. 0.38% MER.
Vanguard High Dividend Yield Index Fund Investor Shares (VHDYX)
Seeks to track the performance of the FTSE® High Dividend Yield Index, which measures the investment return of common stocks of companies characterized by high dividend yields. Provides a convenient way to track the performance of stocks with histories of above-average dividend yields. Follows a passively managed, full-replication approach. 0.35% MER.
Not all of these funds are going to be appropriate for everyone. Some require higher amounts to initiate a position. I tend to stick with the ETFs as I can buy without minimums when I have money to allocate to that specific asset class the fund represents.
I’ll add VYM and VDIGX to my list of possible buys. The management expense ratios are certainly reasonable. Thanks for the information.
T. Rowe Price has a fund similar to VWINX. It is called the New Income Fund and I have shares in that.