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Is Vanguard Dividend Growth's Closing a Sign?

Some wonder whether the popular fund's closure last month may say something about dividend stocks today.

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The closing of the $31 billion Gold-rated  Vanguard Dividend Growth (VDIGX) on July 28 surprised many investors.

The official statement from Vanguard CEO Bill McNabb outlined that Vanguard is "taking steps to slow strong cash flows to help ensure that the advisor's ability to produce competitive long-term results for investors is not compromised." In other words, the fund's closure is best explained as a precautionary step to protect the fund's ability to continue to build on its strong record.

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Ashley Redmond does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.