“Vanguard is proactively taking steps to slow strong cash flows to help ensure that the advisor’s ability to produce competitive long-term results for investors is not compromised,” said Vanguard CEO Bill McNabb. “We have long been committed to protecting the interests of our funds’ shareholders, and demonstrate this conviction by closing or restricting funds to stem further growth.”
Bill McNabb
Bill McNabb

The solid performance record of Dividend Growth fund versus a relevant dividend benchmark and peer funds has resulted in strong cash flows and asset growth. Over the past six months, the fund has received an additional $3 billion in net cash inflows and, over the past three years, the fund’s assets have nearly doubled.

Vanguard has a long history of preemptively restricting cash inflows to maintain funds’ assets at reasonable levels. In addition to the Dividend Growth Fund, other funds that have closed or have restrictions, include Vanguard Capital Opportunity, Vanguard PRIMECAP, and Vanguard PRIMECAP Core funds. Vanguard Convertible Securities Fund and Vanguard Wellington Fund remain closed to most new institutional accounts.

Vanguard Dividend Growth Fund

The $30.6 billion Dividend Growth Fund invests primarily in stocks that tend to offer current dividends. Introduced in 1992, the fund is managed by Wellington Management Company LLP, one of the nation’s oldest and most respected institutional investment managers.

If you’re interested in seeking a similar fund that invests in high-quality companies with a history of increasing dividends, you may wish to consider:

  • Vanguard DividendAppreciation Index Fund, which is passively managed and 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.
Vanguard will continue to monitor the cash flow of the Dividend Growth Fund and will take additional steps to limit the size of the fund if needed. Similarly, should conditions change, Vanguard may reopen the fund.

All asset figures are as of June 30, 2016.

All investing is subject to risk, including the possible loss of the money you invest.