After nearly two decades of success in the U.S. stock market, Vanguard is (finally) taking an active dividend growth strategy overseas.
Dividend Growth (VDIGX) has been a resounding success for Vanguard. The active stock fund has over $50 billion in assets and has delivered market-beating returns with less risk since Don Kilbride started managing the fund in February 2006. I would also argue that the active fund’s success has fueled the popularity of Dividend Appreciation Index (VDADX or VIG), which has over $80 billion in assets.
Vanguard is hoping Wellington’s dividend growth team can have a repeat performance.
In November, Vanguard will launch International Dividend Growth. The fund will charge 0.54% in expenses—steep by Vanguard standards but low in general—and will be managed by Wellington’s Peter Fisher.
Earlier this year (in March), when Vanguard announced that Fisher would take over Dividend Growth from Kilbride at the end of 2023, I rolled up my sleeves and did my homework on Fisher. Not only did I interview the two managers, but I dug into Fisher’s track record. He has applied the dividend growth approach to picking foreign stocks for years. My conclusion several months ago: