Dividend Growth has been lagging. Really lagging. So, not surprisingly, the question I’m hearing most from IVA readers right now is simple: Is it time to move on from Dividend Growth?
I get it. Dividend Growth (VDIGX) has compounded at an 11.9% annual rate over the last three years—solid absolute numbers. But that’s seven percentage points behind Dividend Appreciation Index’s (VDADX) 19.1% pace and a full 13 percentage points behind 500 Index’s (VFIAX) 24.9% annual return.
Dividend Growth has always been a more defensive fund—I expect it to lag when markets are sprinting ahead. Still, let’s not sugarcoat it: this has been far and away the fund’s worst three-year stretch of relative performance—both against the market and against its in-house index fund rival.
And another change looms. Don Kilbride, the fund’s founding portfolio manager, is retiring at the end of the year. For me, as a fellow shareholder, that only sharpens the question: Could my money be working harder elsewhere?
To be clear: Dividend Growth is currently an IVA Portfolio holding—and yes, I continue to invest my own hard-earned dollars in it, right alongside you. But I’m forcing myself to look at it with “fresh eyes,” not the eyes of someone who has been a shareholder for more than a decade.
Next week, I’ll share a deeper dive into the fund’s history—because no fund should be judged solely on one rough stretch. In the meantime, I sat down with portfolio manager Peter Fisher and the newest team member, Tim Casaletto, to hear directly from them about the strategy and what (if anything) is changing.
Here’s what I took away: