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Portfolio > Mutual Funds

Vanguard Launches Global Dividend Growth Fund

By Dinah Wisenberg Brin

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Vanguard has launched an active global dividend growth fund with a $3,000 minimum initial investment and a two-week subscription period that ends Nov. 14.

With the Vanguard International Dividend Growth Fund (VIDGX), portfolio manager Peter Fisher and the Wellington Management team behind Vanguard Dividend Growth Fund will apply their investment philosophy and process to international stocks, the mutual fund giant said.

The new fund focuses on companies with strong balance sheets and high, sustainable free cash flows that allow them to grow dividends over time while reinvesting in future growth, Vanguard said in a statement. It seeks to provide, primarily, a growing income stream and, secondarily, long-term capital appreciation and current income, the company said in a Securities and Exchange Commission filing.

The fund will have a single share class with an estimated expense ratio of 0.54%, compared with the industry average of 1.02%, Vanguard said.

“Vanguard continuously seeks to enhance our investment product lineup to ensure it meets the evolving long-term needs of our clients,” said Dan Reyes, Vanguard Portfolio Review Department head.

“We believe the International Dividend Growth Fund is a compelling option for investors seeking increased international equity exposure in their portfolios,” he added. “The fund also complements our existing dividend growth franchise and we’re confident in the proven investment philosophy and process employed by Wellington Management’s Dividend Growth team.”

Investors may buy into the fund online or by phone or mail during the subscription period, which started Wednesday, according to a prospectus summary filed with the SEC.

During the subscription period, the fund will invest in money market instruments or hold its assets in cash rather than seek to achieve its investment objective, the filing said. This strategy should allow the fund to accumulate sufficient assets to construct a complete portfolio and is expected to reduce initial trading costs, Vanguard stated.

Dinah Wisenberg Brin

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