Vanguard Dividend Appreciation offers a diversified portfolio of highly profitable U.S. dividend-paying stocks. Its focus on dividend growth gives it a quality bent, which should help it weather downturns better than its large-blend Morningstar Category peers. In combination with its cost advantage relative to its category competition, this defensive tilt should help it outperform the Russell 1000 Index over the long term. However, it applies a stringent dividend growth screen, which may preclude it from owning high-quality emerging dividend stocks. We are downgrading the fund's Morningstar Analyst Rating to Silver from Gold, as we think the fund’s process is solid--just not best in class.
Will VIG outperform in future?
Get our overall rating based on a fundamental assessment of the pillars below.
The Process Pillar is our assessment of how sensible, clearly defined, and repeatable VIG’s performance objective and investment process is for both security selection and portfolio construction.
The People Pillar is our evaluation of the VIG management team’s experience and ability. We find that high-quality management teams deliver superior performance relative to their benchmarks and/or peers.
The Parent Pillar is our rating of VIG’s parent organization’s priorities and whether they’re in line with investors’ interests.