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The 5 Best Vanguard Funds of 2014

Here's a look at the best of Vanguard's low-cost arsenal for the current market environment

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Vanguard Dividend Growth Fund

Vanguard dividend growth fund vdigx
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$20.5 billion
Expenses: 0.29%, or $2.90 on every $1,000 you invest
YTD Performance: +1.9%
10-Year Performance: An average of +9.2% per year.

If you’re looking for long-term investments that generate income, Vanguard Dividend Growth (VDIGX) is a great place to park some of your cash.

VDIGX focuses on stocks with strong fundamentals, and thus the ability to grow both their dividends and share prices over the long term. Not only does this add up to good performance, it also adds up to rock-solid stability; consider that the Vanguard Dividend Growth fund lost “only” 27% or so in 2008 as the market crashed, vs. a 37% decline for the broader S&P 500 Index.

Top holdings right now include UPS (UPS), Microsoft (MSFT) and McDonald’s (MCD); These dividend stocks, respectively, command yields of 2.7%, 2.8% and 3.2%.

Manager Donald Kilbride is an old hand at the fund, managing Vanguard Dividend Growth since 2006, so you can be sure that the long-term performance of this fund will continue uninterrupted with a steady hand at the tiller.

Read more about the Vanguard Dividend Growth Fund here.

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