If you’ve decided to invest with Vanguard then you might be interested in one of the funds that offer regular dividend payments. This is a great way of reducing the potential velocity of your investments and further diversify your portfolio.
There are many Vanguard funds that pay dividends. In most cases, you can opt to reinvest these dividends back into the fund or to remove the money for alternative purposes. Depending on the fund you have dividends may be paid monthly, quarterly, bi-yearly, or yearly.
With so much choice and an ever-increasing number of variables, it’s important to thoroughly research your options prior to investing.
What Are Vanguard Dividend Funds
Vanguard is a popular mutual fund company offering investors a range of low-cost funds including ETFs. With the structure of the company differing from other public and private investment firms, you’ll find that Vanguards fees are among the lowest in the world at just 0.29%
Funds are made up of a number of stocks (how many stocks and what stocks will depend on the fund advisors and the fund you choose to invest in). Plenty of these stocks pay dividends and as an investor of the fund, and therefore the stocks you’ll be entitled to these.
However, different companies pay dividends at different times. Some pay monthly, others quarterly, and others annually. Vanguard will collate these dividends and then either periodically pay them directly to you or reinvest them back into the fund (depending on whether you choose income or accumulate funds).
What Is Vanguard Dividend Appreciation, Dividend Growth Etc.
You may have heard of Vanguard Dividend Appreciation or Vanguard Dividend Growth among your research.
These are simply the names of the funds. Vanguard has a large number of different funds and the majority offer dividends. As a result, finding the right fund is likely to require some research and often a consultation with a financial advisor who based on your circumstances should be able to recommend suitable fund(s) for your money.
Some of the funds vary depending on whether the dividend is accumulation or income (more info on this below). Meanwhile, all funds will offer a different level of investment aggression.
Vanguard demonstrates the aggressive nature of the funds through a risk level. These range from 1 through to 5 (or 1 through to 7 if you’re in the UK). Level 1 is the lowest, however, it doesn’t mean the investment is risk-free. Meanwhile, 5 is the highest.
While you’re likely to see better returns on your investment from the aggressive funds your capital is often more at risk and you’re likely to see more volatility in the market.
The risk categories are shown on the main page of the fund (often on the right-hand side) however, they are not guaranteed and will change over time.
Accumulation vs Income Funds
Some dividend funds offer a choice between accumulation and income. Both of these are separate entities, they’ll be trading at different prices, have separate ROIs, and could possibly even have different associated risk factors.
Accumulation funds automatically reinvest the dividend funds for you after fees. This could possibly create a similar effect to compound interest would in a savings account.
Income funds pay out the dividend which can be withdrawn and used as you wish. Some Vanguard funds only pay dividends once a year, others pay twice a year, quarterly or monthly.
How To See Past Dividend Payments From A Vanguard Fund
You can look at the past dividend payments from each fund by navigating to the fund page and selecting the ‘distributions’ tab when on the Vanguard USA website.
On the Vanguard UK website navigate to the fund, be sure to select income if applicable and then click the distributions tab.
Of course, past dividend payments do not reflect the future dividend payments and should only be used as part of your research when deciding on a suitable fund.
When Does Vanguard Announce & Pay Dividends
Different Vanguard funds announce and pay dividends at different times. You should research the fund’s payment schedule before investing to see the frequency and historical announcement and payment dates.
These can change but they are an indicator as to when to expect some kind of announcement.
Once you’ve found the fund you are interested in click the distribution tab to see the recent payment amounts and dates. You can use the calendar on the right-hand side to adjust the dates to see the information over a longer period of time should this be required.
When Does Vanguard Charge Fees?
Vanguard takes the fees directly out of the fund automatically when they are applicable. Vanguard is known as having one of the lowest fee structures in the industry.
Depending on the investment you have with the company these fees can be made up of a number of different things including; general account costs, fund management costs, and ongoing costs.
When you log into your Vanguard account you should be able to download documents that are specific to you. They provide fee information based on your current account status and go into great detail.
Vanguard Updated Account Balances
In the USA, Vanguard account balances are updated once a day at 6PM Eastern Time.
In the UK, Vanguard account balances are updated once a day – I’m not exactly sure of the time. If you know feel free to leave me a comment.
Vanguard Tax Statements
If you have a general account with Vanguard then you will be provided with an annual tax statement that can be used to help you complete your tax returns. These are usually generated in April / May.
If you are based in the USA you’ll be provided with a number of tax forms depending on the accounts you hold. These vary dramatically so you’re best checking with Vanguard directly as to what forms you’ll be provided with and when you should expect to see them in your account.
There’s also a personal tax area where you can view and download previous tax documents should they be required.