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Re: VFIAX vs. VDIGX

@steelpony10 

Also, why do you say Vfiax cratered?

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Re: VFIAX vs. VDIGX

Unfortunately, VG active LC-growth funds are either closed [Primecap funds] or an old fund with long twisted history with a ticker that almost fits, VW-U-SX.

YBB
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Re: VFIAX vs. VDIGX

 
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Re: VFIAX vs. VDIGX


@steelpony10 wrote:

          It cratered, went down nearly as bad, just like you hinted in your original post second paragraph. They’re similar models. These are two balanced funds as pointed out by Yogi but one has more growth potential that's all. VDIGX has outperformed VFIAX since inception by about 3 percentage points by the way. 


Comparing the returns since inception is not meaningful when the funds had different inception dates.  In addition, if the inception date being used for VDIGX is in 1992, the data includes the performance from when the fund had a different investment approach as the Vanguard Utilities Income fund.

A more meaningful since inception comparison would have a stating date from shortly after fund changed to the Vanguard Dividend Growth fund in December 2002.  According to the Portfolio Visualizer analysis for the period from Jan 2003 through Apr 2020, VDIGX had a CAGR of 10.14% and VFIAX had a CAGR of 9.33%.

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Re: VFIAX vs. VDIGX


@PatMorgan wrote:

@steelpony10 wrote:

          It cratered, went down nearly as bad, just like you hinted in your original post second paragraph. They’re similar models. These are two balanced funds as pointed out by Yogi but one has more growth potential that's all. VDIGX has outperformed VFIAX since inception by about 3 percentage points by the way. 


Comparing the returns since inception is not meaningful when the funds had different inception dates.  In addition, if the inception date being used for VDIGX is in 1992, the data includes the performance from when the fund had a different investment approach as the Vanguard Utilities Income fund.

A more meaningful since inception comparison would have a stating date from shortly after fund changed to the Vanguard Dividend Growth fund in December 2002.  According to the Portfolio Visualizer analysis for the period from Jan 2003 through Apr 2020, VDIGX had a CAGR of 10.14% and VFIAX had a CAGR of 9.33%.



@PatMorgan wrote:

@steelpony10 wrote:

          It cratered, went down nearly as bad, just like you hinted in your original post second paragraph. They’re similar models. These are two balanced funds as pointed out by Yogi but one has more growth potential that's all. VDIGX has outperformed VFIAX since inception by about 3 percentage points by the way. 


Comparing the returns since inception is not meaningful when the funds had different inception dates.  In addition, if the inception date being used for VDIGX is in 1992, the data includes the performance from when the fund had a different investment approach as the Vanguard Utilities Income fund.

A more meaningful since inception comparison would have a stating date from shortly after fund changed to the Vanguard Dividend Growth fund in December 2002.  According to the Portfolio Visualizer analysis for the period from Jan 2003 through Apr 2020, VDIGX had a CAGR of 10.14% and VFIAX had a CAGR of 9.33%.


What PatMorgan doesn’t take into consideration is VDIGX had a much smaller AUM base in its earlier years which was an advantage that it no longer has.   I seriously doubt VDIGX outperforms the index over a long time period.   Would expect VDIGX to be less volatile as compared with the index and there is certainly no harm in holding both if you choose to do so.

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Re: VFIAX vs. VDIGX


@cegibbs wrote:


What PatMorgan doesn’t take into consideration is VDIGX had a much smaller AUM base in its earlier years which was an advantage that it no longer has.   I seriously doubt VDIGX outperforms the index over a long time period.   Would expect VDIGX to be less volatile as compared with the index and there is certainly no harm in holding both if you choose to do so.


Look at the actual performance of VDIGX over the most recent six fiscal years, a not so long time period. The net assets in the annual reports of the fund are much larger for those years than for earlier years. During that period the average net cash flow per fiscal year has been 2.3% of the net assets at the start of the fiscal year. The net assets have changed mostly due to changes in the value of the holdings of the fund.

An analysis over that period by Portfolio Visualizer reports that VIDGX had an annualized total return (CAGR in the Portfolio Returns of Portfolio Visualizer) of 12.46% and a standard deviation of 9.80%, VFIAX had an annualized total return of 12.64% and a standard deviation of 11.25%. VDIGX had a slightly lower return (a -0.72% difference in the final balances) and a lower standard deviation.

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Re: VFIAX vs. VDIGX

I figure growth or blend, which is earning better. I pick growth, so I go with VIGAX, not VFIAX. If I was of mind growth will slow down, FAANG, stocks cooling off, then I would pack VFIAX. The only reason I would pick both is having a large enough portfolio, I want to keep positions in both, assuming growth may slow down and I like a more complex portfolio, which is the case for me.

If value makes a comeback I would consider adding VVIAX, but I do not see that, plus I have some in VWENX. If I wanted less equity, I'd consider VWIAX.

If I want some downside protection, then holding VDIGX seems good and I have some of that. I also like USMV.

As for equities, beyond these choices, I look at other funds, usually active for better growth potential.

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Re: VFIAX vs. VDIGX

Thanks all for the perspectives and insights!

After due reflection and a lot of investigation/data crunching on Portfolio Visualizer and elsewhere, I have decided to drop VFIAX, VDADX, and even VDIGX from further consideration (I have held all in the past and, though they are good funds in their own right, they each have their own issues in my view).

Instead, for my particular IRA portfolio, I am just increasing the amount allotted to Wellesley and focusing on VIGAX (Growth) and VGHAX (Health Care) to give VWIAX that extra juice, both in terms of moving beyond Value (i.e. VIGAX) and increasing quarterly income (i.e. VGHAX).

Thanks again,

Steve

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Re: VFIAX vs. VDIGX


@Newer_Retiree wrote:

Instead, for my particular IRA portfolio, I am just increasing the amount allotted to Wellesley and focusing on VIGAX (Growth) and VGHAX (Health Care) to give VWIAX that extra juice, both in terms of moving beyond Value (i.e. VIGAX) and increasing quarterly income (i.e. VGHAX).


I don't know about "extra juice" that VGHAX gives to VWIAX, but here is a table of the Income Returns for the past 10 years from the performance pages of the funds at the Vanguard web site.

YearVGHAXVWAIX
20191.41%3.48%
20181.20%3.03%
20171.22%3.21%
20160.91%3.19%
20151.33%3.07%
20141.24%3.41%
20131.85%3.35%
20122.20%3.53%
20111.97%4.04%
20101.74%4.19%
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Re: VFIAX vs. VDIGX

I also commented on the sporadic distributions from VGHAX as did Yogi I believe. Maybe for an explore position but, I would not count on capital distributions from a sector fund except for maybe the dividends from a consumer staples VDC etf.

Fishingrod 

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Re: VFIAX vs. VDIGX

Hi @PatMorgan 

The extra "juice" as I understand it is from the actual distributions recorded by Vanguard on their site. They are quite high and have been pretty consistent over recent years (per Vanguard's and M*'s Performace Distrbution websites).

That is, of course, capital gain dependent and who knows what the future has in store in that regard? A rock and a hard place, with many arguing dividends are sure to fall and others arguing "goodbye capital gains" in this environment.

Pat, I recall you indicated that your own preferred combo was VWIAX with the VGSLX REIT, equally or more volatible. On the Vanguard website it shows the annual distribution from VGHAX to be higher than VGSLX (which I used to own) or VDC (Consumer Staples ETF) for that matter. Maybe I am missing something here.

Thanks.

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Re: VFIAX vs. VDIGX

Thanks @Fishingrod.

I don't see the sporatic nature of the distibutions from VGHAX in looking at the actual Vanguard or M* websites. I believe @yogibearbull's concern was more with volativity of the fund and his thinking that any sector investing for retirees, including REITS, was for traders (and dare I say it, gamblers). I could be wrong.

Actual annual money in hand still seems to be higher than Wellesley or the VGSLX REIT for that matter. Maybe I am misreading it.

VGHAX is definitely an enhancement or an "explore" as Yogi would call it. My hard core is VWIAX, BAGIX on the bond front, and for now, VIMAX Growth. I have dropped Pimix as well with the yield and price dropping as they have, the less than transparent nature of the fund (at least from my perspective), and a gut feeling that a mortgage heavy, leveraged fund is in for a bumpy ride.

 

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Re: VFIAX vs. VDIGX

@Newer_Retiree,

As long as you are aware that most of the 'income' is coming from unpredictable capital gains with VGHAX. Sector funds are very volatile even when they are considered a more defensive sector.

Not to be political at all, but what if one of the parties in power chose to change health care as we know it, really. It may affect the returns that we have become accustomed to from a health care fund.

I think you are trying to have your cake and eat it too if you understand what i mean. I don't blame you, and VGHAX may not falter. But, I would personally feel more comfortable with a smaller amount that is not depended on for income.

Fishingrod

 

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Re: VFIAX vs. VDIGX

The annual income returns from the Vanguard web site for the funds indicate that VGHAX has had no "extra juice" in terms of income relative to VWIAX.

The per share total distributions (income and capital gain) of VGHAX have been inconsistent over the past 10 years: $2.126 in 2012 and $11.427 in 2014. Those distributions amounts are per share and are less meaningful than the distribution amount: the distribution per share multiplied by the number of shares. Because the NAV of VGHAX has usually been higher than VWIAX, the same dollar amount invested would have purchase fewer shares of VGHAX.

I would not call that allocation that I have to VWIAX and VGSLX in an IRA a prefer combo. It is simply what I have. The annual income returns at the Vanguard web site have been higher for VGSLX than for VGHAX.

Maybe what you are missing is that capital gain distributions, especially from investments in a tax-advantaged account, is not income.

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Re: VFIAX vs. VDIGX

@PatMorgan 

Thanks and I guess I am not getting it.

How is income (yield) plus capital gains in an IRA not translatable into real money in hand? One of the advantages of VWIAX is that nice end of year capital gain boost ... certainly not the current annual yield of 3.06% alone.

Also, you mention that a more important consideration is distribution per share/NAV. Yes, VCHAX has a NAV of $86 while Wellesley that of $64, compared to VGSLX REIT ($102), however, it is still reasonable and goes farther in producing real income by that calculation.

The inconsistency of income plus capital distributions for VGHAX you mention doesn't seem to hold water ... it has pretty consisently been over $6.0 annually since 2013 compared to VGSLX's $3,0.

In terms of total returns, M* shows that VGHAX has beat VGSLX substantially in all but 2 years since 2010.

Portfolio Visualizer has VGHAX at a Sharpe Ratio of .74 and VGSLX at .45. Also, VGHAX's volativity is at 12.92% and VGSLX's at 21.7%, with VGHAX having higher Annual Returns since 2015.

How then, in smaller doses, is VGHAX not a better revenue enhancer to my big holding of VWIAX than VGSLX REIT?

I freely admist, I am still not getting it.

You mentiion that you have VGSLX with Wellesley but that isn't necessarily your preferred combo, what then within the Vanguard family would you add to it instead? I do have VIGAX for the growth.

I don't think either VDIGX or VDADX is going to get me there.

I am by no means simply arguing for a pre-determined conclusion, but I just am not seeing where there is neccessarily a better choice. I don't simply want to put all of my equity money into Wellesley with a little VIGAX on the side.

Many thanks, I welcome your insights!

Steve

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Re: VFIAX vs. VDIGX

Hi @PatMorgan (others) I really could use your additonal insights and perspectives here!!

I am not trying to argue or go on or on dithering and am looking to put this to bed.

I have simplied my portfolio down to a lot of Wellesley, a portion of VIMAX Growth, and some BAGIX bond.

I do need more quarterly/annual income than that and want to do it within the Vanguard community. I have gone the route of PIMIX, PCI, PDI, etc., in the past and tried VEIRX Vanguard's Equity Income but for various reasons concluded that these were not "buy and hold/forget" enough for me.

Whether VGHAX health care or VGSLS real estate is the answer to giving some extra income to my current combination, I am torn. Pat makes some good points regarding VGHAX, though I admit I don't really understand how Pat came up with her conclusions in that last post,

If not using a sector fund for income, I am the point of going back and just adding Wellington to the Wellesley to increase the equity allocation and accept the duplication or lack of diversification (all LC) with just holding Wellesley, Wellington, and Vimax Growth.

Thoughts?? @yogibearbull@Fishingrod, or @FatKat, I know you have tried to set me straight in the past on this but can you weigh in one last time here so I can resolve this in my own mind? 

Many thanks. 

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Re: VFIAX vs. VDIGX


@Newer_Retiree wrote:

How is income (yield) plus capital gains in an IRA not translatable into real money in hand? One of the advantages of VWIAX is that nice end of year capital gain boost ... certainly not the current annual yield of 3.06% alone.

Assets in an IRA become real money in hand when cash is withdrawn from the IRA. A distribution by a fund is not a boost. If the distribution is reinvested, the value of the fund account does not change. If the distribution is taken in cash, the value of the fund account is reduced by the amount of the distribution.


@Newer_Retiree wrote:

The inconsistency of income plus capital distributions for VGHAX you mention doesn't seem to hold water ... it has pretty consisently been over $6.0 annually since 2013 compared to VGSLX's $3,0.

If you looked for one more year, you would have seen that the total distributions of VGHAX in 2012 was $2.126 per share.


@Newer_Retiree wrote:

In terms of total returns, M* shows that VGHAX has beat VGSLX substantially in all but 2 years since 2010.

Portfolio Visualizer has VGHAX at a Sharpe Ratio of .74 and VGSLX at .45. Also, VGHAX's volativity is at 12.92% and VGSLX's at 21.7%, with VGHAX having higher Annual Returns since 2015.

How then, in smaller doses, is VGHAX not a better revenue enhancer to my big holding of VWIAX than VGSLX REIT?

If you want to make investment decisions based on total returns for the past 10 years, Sharpe Ratios, volatility, or revenue enhancement (whatever revenue enhancement is) of an individual fund, you are free to do so.

One thing that I look at is the trend in the annual income distributions taken as cash. That income is strongly related to what Vanguard reports as the annual Income Return, such as on the web page of the Historical Returns for VGHAX. Vanguard does not include capital gain distributions in the Income Return, and I do not treat those distributions as income.


@Newer_Retiree wrote:

You mentiion that you have VGSLX with Wellesley but that isn't necessarily your preferred combo, what then within the Vanguard family would you add to it instead? I do have VIGAX for the growth.

I don't plan to add any equity funds to my portfolio. As for Vanguard equity funds, I also invest in Total Stock Market Index and Tax-Managed Small-Cap in a taxable account.


@Newer_Retiree wrote:

I don't think either VDIGX or VDADX is going to get me there.

I am by no means simply arguing for a pre-determined conclusion, but I just am not seeing where there is neccessarily a better choice. I don't simply want to put all of my equity money into Wellesley with a little VIGAX on the side.

You should invest in what is going to get you to where you want to be. My investments are likely irrelevant to where you want to be.

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Re: VFIAX vs. VDIGX

Hi @Newer_Retiree ,

I am not trying to argue either or tell you how to invest, really. I know you have looked at the charts for all the funds and compared them but, there is one that sticks out to me.

Look at the 5 year chart comparing VGHAX and VDADX. You will find that the NAV (just price with no distributions invested) of VGHAX has Decreased negative -12.58% over the last five year period.

The NAV of VDADX has Increased 38.78% over that time.

The total return of VGHAX with all dividends and capital distributions reinvested is +35.96% over the same last five years.

The total return of VDADX with all dividends reinvested is +53.68%. That is a difference of 17.72%.

So $10,000 turned into $13,596.07 with VGHAX over the last five years and in VDADX it turned into $15,368.19

This is in a bull market. Yes you may counter with yeah but look at 1,3,10 etc year, I know. Past returns are not indicative of future returns.

Fishingrod

https://advisors.vanguard.com/investments/products/vghax/vanguard-health-care-fund-admiral-shares#ov...

This will give you ten years of info if you haven't already found it.

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