Vanguard plans to change the target benchmarks for two of its dividend-focused index funds and its dividend growth fund, a spokesman confirmed Wednesday.
Starting in the third quarter, Vanguard with change the benchmark for its $70.7 billion Dividend Appreciation Index Fund to the S&P U.S. Dividend Growers index from the Nasdaq U.S. Dividend Achievers Select index, and its $3.8 billion International Dividend Appreciation Index Fund 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.
Additionally, Vanguard will change the performance benchmark for its $50.5 billion Dividend Growth Fund to the S&P U.S. Dividend Growers index. Wellington Management Co. will continue to subadvise the fund.
No changes will be made to the three funds' investment objectives, strategies or portfolio management processes.
"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's portfolio review department in the release. "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."
Vanguard managed $7.8 trillion in assets as of April 30.