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Investing Specialists

Five Surprising Vanguard Fund Statistics

Datapoints that make you think twice about some Vanguard funds.

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If you spent as much time researching one mutual fund family as I do, you could find yourself with a lot of datapoints that may not make it into an analysis, article, or even polite conversation. Not all of these odds and ends are devoid of value, though. In this article I'll share some of the more interesting oddments I've encountered recently and a few thoughts as to why they're notable.

2.73% vs. 2.88%
That's the 12-month yield of Vanguard High Dividend Yield Index (VHDYX) compared with the same measure for  Vanguard Value Index (VIVAX). That's right; Value Index's yield is higher, at least by this measure of yield, which Morningstar calculates by dividing the sum of the funds' income distributions for that past 12 months by the previous month's net asset value. There are other ways of calculating a fund's yield that gives High Dividend Yield Index a higher yield, though not by much. Vanguard's Web site, for example, shows a 30-day yield of 3.35% for High Dividend Yield and 3.02% for Value Index, which doesn't seem like a huge difference to me.

Why is this surprising? When High Dividend Yield launched about a year and a half ago, I expected it to offer a more generous yield than you could get from a conventional value equity fund like Value Index. So far, though, the biggest difference between High Dividend Yield and Value Index has been their sector weights. Value Index has more in software and hardware stocks and less in consumer goods and industrial materials. That helps explain why High Dividend Yield has lost less than Value Index in the last year, since industrial and consumer goods stocks have been among the better-performing sectors. That also may help explain the similar yields. Value Index's holdings have fallen farther, increasing the portfolio's yield. If I had to choose between the two now, I'd pick Value Index because you get about the same yield for half the expense ratio (0.20% versus 0.40%).

Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.