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The Vanguard Equity Income Fund Investor Essay

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Fund overview The vanguard equity income fund-investor (VEIF-Inv) is an active managed equity fund which is available to investors who meets the minimum purchase amount requirement (3,000 dollars). Its inception date is 21st March, 1988, and its ticker symbol is VEIPX. VEIF-Inv has used the spliced benchmark index: Russell 1000 Value Index through July 31, 2007; FTSE High Dividend Yield Index thereafter. VEIF-Inv has earned average total returns of 11.02 % per year since inception (calculation from data in appendix 1). This means that investing 100 dollars when fund opened in 1988Q2 with all income reinvested would by 2016Q3 have increased to 1580.47 dollars. Until 31st October, 2016, the fund size is almost $5.38 billion (Eikon). As of 30th September, 2016, the amount of fund net assets is $23.6 million. VEIF-Inv uses two management teams- Wellington Management and Vanguard’s in-house quantitative equity group that have its own investment strategy and manage 64% and 34% of total fund assets respectively. Investment strategy and costs The fund is managed by two different investment advisors, which are Wellington Management Company and Vanguard’s Quantitative Equity Group. So investment strategies are summarized on its 2016 annual report as follows “Wellington Management Company, proposes a fundamental approach to seeking desirable stocks. Their selections typically offer above-average dividend yields, below-average valuations, and the potential for dividend increases in
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