"While many funds with 'Dividend' in their names include a lot of companies with high dividend yields but shaky finances, Kilbride's emphases on valuation and the prospects for dividend payouts, not necessarily the current dividend yields, have kept him away from many household name (and now infamous) large financial stocks.

"Instead, he has historically favored consumer-staples, healthcare and industrials stocks, though he keeps a diversified framework (including significant holdings in technology stocks) despite limiting the portfolio to about 50 holdings.

"His eye for value has led him to increase the fund's positioning over just the past month or two in large-cap energy stocks with high dividends and a lot of resource value.

"Companies including ExxonMobil, Chevron, Marathon and BPand other famous global energy stocks accounted for 18.2% of assets recently. Kilbride started out as an oil-company analyst at Wellington Management, so he has excellent experience to know when such stocks are good values.

"A decrease in consumer-discretionary positions is but one of several reasons that we consider Vanguard Dividend Growth to be our favorite U.S. equity fund for 2009.

"In a bear market like the current one, it pays to be nimble if certain stocks and sectors get beaten down too much and represent true long-term value for new purchases.

"Kilbride has a record of nimbleness, and, at about $1.7 billion in assets, his fund is still small enough for sufficient flexibility to enhance returns through opportunistic repositioning.

"Also, Kilbride's focus on companies with the financial strength to maintain and even grow their dividends even in the current environment should provide some protection against catastrophic loss in the event that the economy gets worse before it gets better."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.