Why does Vanguard's Dividend Growth Fund not show dividend growth according to yahoo finance's historical distribution data?

In 1993, Vanguard's Dividend Growth Fund Investor shares (from here on out it will be known as VDIGX) distributed a total of $0.96 in dividends. If I had bought a share on Jan 4, 1993 at 10.93, then I would have gotten an insane 8.7% dividend yield which is significantly higher than the S&P 500's 2.7% dividend yield. However, in 2013, the total annual dividend paid was about $0.49, which a lot less than the dividend I would've gotten in 1993. Note all of this data was obtained using yahoo finance.

While the above example used specific dates, it does appear that, when graphing the data, the dividends have not been growing at all in this fund. What I would like to know is whether the data I am looking at is accurate. Specifically, are the dividends in yahoo finance adjusted for inflation and that's why there doesn't appear to be any dividend growth in the fund. If its not inflation, then could someone provide a reasonable explanation as to why there doesn't appear to be any dividend growth?

  • 2
    According to the web page for the fund on the Vanguard web site, Effective December 6, 2002, the fund changed its investment objective and concentration policy. Prior to making these modifications, the fund was called Vanguard Utilities Income Fund, reflecting its former policy of investing in income-producing stocks of utilities companies. The performance prior to December 6, 2002, reflects the fund’s performance under its former investment objective and concentration policy. Commented May 9, 2014 at 3:37

1 Answer 1


I think you are mixing up forward looking statements with the actual results. The funds objective

The fund invests primarily in stocks that tend to offer current dividends. It focuses on high-quality companies that have prospects for long-term total returns as a result of their ability to grow earnings and their willingness to increase dividends over time

Obviously in 1993 quite a few companies paid the dividends and hence VDIGX was able to give dividends. Over the period of years in some years its given more and in some years less. For example the Year 2000 it gave $ 1.26, 1999 it gave $ 1.71 and in 1998 it gave $ 1.87

The current economic conditions are such that companies are not making huge profts and the one's that are making prefer not to distribute dividends and hold on to cash as it would help survive the current economic conditions.

So just to clarify this particular funds objective is to invest in companies that would give dividends which is then passed on to fund holders. This fund does not sell appreciated stocks to convert it into dividends.

  • This combined with @Dilip Sarwate's comment provided the answer I needed. Thanks.
    – Jason Zhu
    Commented May 9, 2014 at 13:20
  • @Dheer Do you know of a US mutual fund that sells appreciated stocks and passes the gains to the shareholders as dividends instead of as capital gains? That is, a mutual fund that "convert it into dividends" as your last sentence suggests happens with some mutual funds? Commented May 9, 2014 at 16:20
  • @DilipSarwate Nope I don't know any Fund in US that does it. Not sure if its legal in the US.
    – Dheer
    Commented May 12, 2014 at 8:12

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