This Fund's Dynamic Subadvisor Duo Delivers

Alec Lucas: Silver-rated Vanguard-Equity Income (VEIPX) benefits from consistent leadership. Since late 2005, the fund's assets have between split between anchor Wellington Management and Vanguard's in-house quantitative-equity group. 

Veteran Michael Reckmeyer has led Wellington's roughly two-thirds slice of the portfolio since year-end 2007, while James Stetler of Vanguard's quant group has overseen the rest of the fund since 2003. Both subadvisors try to find value in the market's short-term dislocations, but do so in distinct ways. 

Reckmeyer likes stocks with above-average dividends and low valuations but unappreciated growth prospects. Unlike Reckmeyer, who is willing to diverge from the fund's dividend-focused benchmark, Stetler and his quant team stay close to it, using computer models to pick stocks they think have the right combination of factors to outperform. 

Rock-bottom fees help the fund deliver a top-decile yield without taking on undue risk. The fund looks good from a total-return standpoint, too. It's a fine choice for investors looking for current yield combined with the potential for long-term growth of capital.