Fund vs. Fund – 1 Full Quarter


One month ago today, I started my new job. So as you can imagine, I didn’t manage to get around to comparing the funds. However, this will be the 3rd month I’m comparing, which is a substantial benchmark for comparison. This means, I will have 1 quarter’s worth of dividends contributing to the returns of these investments.

The purpose of this exercise is to compare a focused approach to investing in quality dividend paying companies to using a fund of cherry picked stocks selected by experts. At the time I started this comparison, Kfund1 was composed of my personal holdings in MCD, MSFT, MRK, WMT, JNJ, and LMT, all of which are also part of the Vanguard Dividend Growth Fund (VDIGX). KFund2 was composed of my personal holdings in PEP, PG, WMT, KO, XOM, CVX, MCD, and MMM, all of which are also part of the Vanguard Dividend Appreciation Index Fund (VDAIX).

Below are the 2 Vanguard dividend funds I have and the change in value they have seen in the past 3 months.

up 5.78%

up 6.17%

Not too shabby. I don’t like comparing results to major indexes, because major indexes don’t reflect the cost of a Doritos Locos Taco from Taco Bell (Yes, I eat these every week). A 10% yearly return is far better than you see in any savings account or treasury bond these days. With over 5% in 1 quarter, breaking 10% for the year seems like a low ball goal.

Now let’s see how the individual companies that I own did in that time.

up 7.20%

up 8.86%

Unlike my comparison 2 months ago, My investments actually significantly outperformed the funds. I think a big part of this success is due to JNJ, MCD, and MMM, each of which have seen at least 7% gains in the last 3 months.

I’d love to continue reporting on this comparison, but with the house hunt accelerating, I fear I may need to sell some of these positions to make the down payment. We’ll see though. Stay tuned.

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