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View More Press Releases by Vanguard

Press release:

Vanguard Closes Dividend Growth Fund to most New Investors

Issued by: Vanguard

Date: July 28, 2016

July 28, 2016 -- Vanguard today closed Vanguard Dividend Growth Fund to most new investors to reduce the fund's recent growth rate.

Effective immediately, the fund is no longer accepting new investor accounts except from defined contribution retirement plan participants in plans that already offer the fund as an investment option. Investors with existing accounts in the fund may make additional purchases.

"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."

The fund's performance record 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 acting preemptively to restrict cash inflows to funds experiencing rapid or dramatic growth. 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.

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.

Investors seeking a similar fund that invests in high-quality companies with a history of increasing dividends may wish to consider Vanguard Dividend Appreciation 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.

Notes:

  • All asset figures are as of June 30, 2016.
  • All investing is subject to risk, including the possible loss of the money you invest.
  • Past performance is no guarantee of future returns.
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