News release

Vanguard to Change Benchmarks for Dividend Funds

VALLEY FORGE, PA (June 1, 2021)—Vanguard today announced plans to change the target benchmarks for two dividend-focused index funds in the third quarter of this year. Vanguard Dividend Appreciation Index Fund will change its benchmark to the S&P U.S. Dividend Growers Index from the Nasdaq US Dividend Achievers Select Index. Vanguard International Dividend Appreciation Index Fund will change its benchmark to the S&P Global Ex-U.S. Dividend Growers Index from the Nasdaq International Dividend Achievers Select Index. The respective ETF Shares of these funds, VIG and VIGI, will also track the new benchmarks.

“As part of our ongoing due diligence process, Vanguard determined that new benchmarks would best enable our Dividend Appreciation funds to perform in line with their investment objectives,” said Kaitlyn Caughlin, head of Vanguard Portfolio Review Department. “We believe S&P Dow Jones Indices’ approach to dividend indexing closely aligns with Vanguard’s views, and we are confident that S&P DJI is well-positioned to administer the indexes moving forward.”

The underlying methodology of the S&P DJI’s benchmarks is fully transparent and includes three important new features for the funds:

  • Buffered yield screens intended to minimize excessive turnover. At each annual rebalance, all dividend-paying stocks in the investible universe are ranked in order of dividend yield with the highest-yielding at the top. A stock will not be eligible for first-time admission to the index if its dividend yield is in the top 25%. During subsequent rebalances, any stock already in the index may remain unless its yield is in the top 15%.
  • Free-float adjustments to ensure each index will count only shares that are available to investors. The benchmarks will exclude closely held shares, such as those held by members of a company founder’s family.
  • A three-day rebalance window to help manage transaction costs and minimize tracking error. The periodic changes to add, remove, or rebalance the constituent stocks in each index will take place over three days instead of one day.

Additionally, the performance benchmark for Vanguard Dividend Growth Fund will be changed to the S&P U.S. Dividend Growers Index. The new benchmark is well-aligned with the fund’s investment strategy and will also provide consistency across Vanguard’s broader dividend appreciation fund lineup. The fund will continue to be advised by Wellington Management Company LLP, and the benchmark change is expected to occur in the third quarter of 2021. The investment objectives, strategies, and overall portfolio management processes of the three funds will not change, and the expense ratios are expected to remain the same.

Vanguard’s approach to benchmark selection

Based on deep indexing experience and expertise, Vanguard believes investors benefit from indexes that are objective, transparent, investable, and representative of the risk and return characteristics of the target market. As such, the firm has developed and adheres to a multi-dimensional process to evaluate and select benchmarks for funds and ETFs.

The suitability of each fund’s benchmark is based on index construction methodology, market coverage, classification criteria, rebalancing schedule, cost, and other standards. Vanguard also regularly assesses index providers to ensure their data integrity processes and risk management practices support their ability to provide the timely, accurate, and high-quality data required to develop and administer indexes on an ongoing basis. The firm places a high value on the objectivity, credibility, and independence offered by index providers.

An industry pioneer, Vanguard has long served as the world’s indexing leader. In 1976, Vanguard created the first index mutual fund, now Vanguard 500 Index Fund, which seeks to match the performance of the S&P 500 Index. The low-cost, broadly diversified exposure to stock and bond markets provided by index funds and ETFs has helped improve outcomes for millions of investors around the world. Today, Vanguard manages $6.1 trillion in global index assets.


About Vanguard

Vanguard is one of the world’s largest investment management companies. As of April 30, 2021, Vanguard managed $7.8 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 439 funds to its more than 30 million investors worldwide. For more information, visit

Asset figures as of April 30, 2021 unless otherwise noted.

For more information about Vanguard funds, visit 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.

Vanguard ETF Shares are not redeemable with the issuing fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

All investing is subject to risk, including the possible loss of the money you invest. Investments in stocks issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets. Diversification does not ensure a profit or protect against a loss.

The S&P U.S. Dividend Growers Index and the S&P Global Ex-U.S. Dividend Growers Index are products of S&P Dow Jones Indices LLC (“S&P DJI”), a division of S&P Global (“S&P”), or its affiliates, and have been licensed for use by Vanguard. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC, a division of S&P; Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by S&P DJI and sublicensed for certain purposes by Vanguard. Vanguard Dividend Appreciation Index Fund and ETF and Vanguard International Dividend Appreciation Index Fund and ETF are not sponsored, endorsed, sold, or promoted by S&P DJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s), nor do they have any liability for any errors, omissions, or interruptions of the S&P U.S. Dividend Growers Index and the S&P Global Ex-U.S. Dividend Growers Index.

Vanguard Marketing Corporation, Distributor.