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Old 12-10-2014, 10:00 PM
 
600 posts, read 1,425,682 times
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i'm looking for another index fund..
what is the advantage/disadvantage of this dividend index fund compared to an index fund that tracks s&p 500?



https://personal.vanguard.com/us/fun...FundIntExt=INT
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Old 12-10-2014, 10:21 PM
 
748 posts, read 725,021 times
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Looks fine, in my opinion. The 23% industrial component undoubtedly preformed very well lately, due to falling energy prices.

The premise is OK: Dividend paying companies tend to be more solid for investment than dividend nonpaying companies. Yet the market knows this & generally prices accordingly.

Your downside is that your yield is a tiny <20 basis points higher than the SPY, and you might (probably) bear greater volatility & single stock risk than broad S&P 500 diversification. You might have greater upside as well, especially with how the industrials have been performing lately.
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Old 12-11-2014, 02:33 AM
 
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not enough difference either way to matter.
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Old 12-11-2014, 11:14 AM
 
29,551 posts, read 32,565,344 times
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Quote:
Originally Posted by Brom View Post
i'm looking for another index fund..
what is the advantage/disadvantage of this dividend index fund compared to an index fund that tracks s&p 500?



https://personal.vanguard.com/us/fun...FundIntExt=INT
Pros:

--It should hold up better in market downturns/crashes
--Low Expenses
--Has a good chance of outperforming the S&P 500 Index with less volatility over long periods of time.

Cons:

--It will normally underperform in market rallies (as has been the case most of the past 5 years).
--It isn't very well diversified. Over 36% of assets are in its 10 largest holdings vs. 18% for the S&P 500.

Overall, I like it.
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