Fund vs. Fund

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I found a fun article the other day about Warren Buffett. Apparently, he made a bet with Protege, a hedge fund management firm in New York, back in 2008 that over 10 years he could outperform their best funds by just investing in a low-cost index fund that follows the S&P 500, the Vanguard 500 Index Fund Admiral Shares (VFIAX). Buffett is wagering $320,000 in Treasury Bonds that they hedge funds are not worth the fees. After 6 years, the VFIAX is up 43.8% and the hedge funds are only up about 12.5% after fees. (Source)

I thought it might be fun to track something similar. I am invested in 2 dividend growth funds with Vanguard. I decided to look at the top holdings for each and noticed that I owned positions in my taxable account for about half of them. So I thought it might be fun to track how the funds perform compared to the underlying securities I am invested in elsewhere.

The first of the funds is the Vanguard Dividend Growth Fund (VDIGX). At the time of writing this, the stocks I own in the top 10 holdings are as follows:
MCD, MSFT, MRK, WMT, JNJ, LMT
Henceforth these will be tracked as KFund1

The second fund is the Vanguard Dividend Appreciation Index Fund (VDAIX). At the time of writing this, the stocks I own in the top 10 holdings are as follows:
PEP, PG, WMT, KO, XOM, CVX, MCD, MMM
Henceforth these will be tracked as KFund2

It got a little complicated since I own KO in both my joint account, which I track on this blog, and my individual account. I decided to just use the position in my Joint Account for tracking. Since the totals for the individual investments and the investments in the funds are completely different, I’m just going to be reporting the percentage changes each month. There’s no point in sharing the actual balances publicly since what matters is the growth, I’ll be tracking the cost basis offline.

I will have an update on the value changes next month. In all cases, dividends will be automatically reinvested.

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