News release

Vanguard Closes Dividend Growth Fund

VALLEY FORGE, PA (July 28, 2016)—Vanguard is implementing measures to control asset growth of its $30 billion Dividend Growth Fund. Effective immediately, the fund will no longer accept new accounts; existing shareholders may continue to invest without limitation.  

“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 (see accompanying table). 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 maintain funds’ assets at reasonable levels. In addition to the Dividend Growth Fund, several other funds are closed or have restrictions. Vanguard Capital Opportunity Fund, PRIMECAP Fund, and PRIMECAP Core Fund are closed to new investor accounts, except for specified retail clients. Vanguard Convertible Securities Fund and Vanguard Wellington Fund continue to be closed to some new institutional accounts.

Vanguard offers investors a combination of low-cost, high-value index and active funds to help meet their needs. The firm’s distinctive approach to active management combines low fees; disciplined, clearly defined strategies; the expertise of both internal and external investment advisors; and a long-term orientation. Vanguard researchers found that a combination of quantitative and qualitative inputs can improve the average investor’s experience in actively managed funds. For more information, refer to Keys to improving the odds of active management success.

Introduced in May 1992, the Dividend Growth Fund is designed to provide investors with some income while offering exposure to dividend-focused companies across all industries. The fund focuses on high-quality companies that have both the ability and the commitment to grow their dividends. The fund is managed by Donald J. Kilbride, Senior Managing Director, Wellington Management Company LLP.

Founded in 1928 and based in Boston, MA, Wellington Management is among the nation's oldest and most respected institutional investment managers. Wellington provides advisory services to 21 Vanguard mandates, representing more than $337 billion in assets. As Vanguard's longest-tenured advisor, the partnership with Wellington dates back to the launch of Vanguard's oldest fund, Wellington Fund, in 1929. Upon Vanguard's founding in 1975, Wellington Fund became a charter member.

About Vanguard

Vanguard is one of the world’s largest investment management companies. As of June 30, 2016, Vanguard managed more than $3.6 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers more than 350 funds to its more than 20 million investors worldwide. For more information, visit vanguard.com.

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The Fund reported an expense ratio of 0.33% as of May 25, 2016.

The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so investors' shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at
www.vanguard.com/performance. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.


All asset figures as of June 30, 2016, unless otherwise noted.

For more information on Vanguard funds, visit vanguard.com, or call 800-662-7447 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

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

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