The Vanguard Dividend Appreciation ETF (VIG 0.19%) isn't the most popular exchange-traded fund (ETF) on the market. With $83.7 billion in assets under management, it's not even among the five largest ETFs in the Vanguard family.
The Vanguard Dividend Appreciation ETF offers exposure to high-growth U.S. tech companies and potential for fast dividend growth, making it a compelling alternative to SCHD. Despite short term underperformance, VIG presents a buying opportunity for long term investors focused on compounding dividends. VIG has outperformed SCHD in the last decade, delivering a 253.8% total NAV return, driven by its tech and financial sector weightings.
My Top 15 High-Growth Dividend stocks outperformed SPY and VIG in March, posting a loss of 3.26% compared to SPY's 5.86% and VIG's 4.50%. The April 2025 list offers an average dividend yield of 1.25% and is potentially 31% undervalued, poised for strong long-term returns. Dollar cost averaging into the top 15 stocks each month shows a 68.54% success rate, with 61 out of 89 stocks leading to positive gains.
Dividend growth investors prioritize growing payouts over high yield, making VGG:CA an attractive option for Canadian investors seeking long-term wealth generation through reinvested dividends. VGG:CA mirrors VIG but offers potential tax advantages for Canadians, despite a higher management expense ratio compared to its U.S. counterpart. The fund's top holdings are stable dividend growers, with VGG:CA boasting a higher 10-year average dividend growth rate (9.5%) compared to VIG (7.9%).
VIG's Index rebalanced last week and now counts Eli Lilly as its #5 holding with a 3.45% allocation. The ETF is on an impressive 11-year dividend growth streak. The Index yield dropped 0.04% to 1.81%, but VIG's components have five-year historical dividend growth rates and one-year estimated earnings growth rates around 10%. The dividend growth streak should continue. As a cross between a large-cap value and large-cap blend fund, VIG seems somewhat expensive, with a 20.49x forward P/E. I find it's somewhat complementary to SPY, with 43% overlap.
There's a lot of uncertainty surrounding the economy and stock market right now. Between tariff news, trade tensions, and all three major stock market indexes being down for the year (at the time of this writing), many people are on edge.
Increased market volatility and recession risks make dividend-focused ETFs with healthcare, consumer staples, and utilities exposure more attractive for downside protection. Vanguard Dividend Appreciation Index Fund ETF may struggle due to high exposure to tech and financial sectors amid economic uncertainty and trade war impacts. Other dividend-focused ETFs like First Trust Morningstar Dividend Leaders Index Fund and Capital Group Dividend Value ETF offer better risk-adjusted returns.
Vanguard Dividend Appreciation Index Fund offers a balanced mix of dividend growers and high-growth tech companies, making it a versatile dividend growth investment. VIG complements Vanguard Total Stock Market Index Fund, which provides exposure to over 3,600 companies and throughout all market indexes. Over the past year, VTI slightly outperformed VIG, reflecting their differing strategies.
The stock market recently entered a correction phase, which is a decline of 10% or more from the recent peak. The S&P 500 (^GSPC 2.13%) just hit that level on Thursday, while the Nasdaq Composite (^IXIC 2.61%) has now tumbled more than 14% from the top.
The heaviest weighted components of the S&P 500 are companies like Apple, Microsoft, and Nvidia -- tech leaders that tend to reward their shareholders largely through their rising stock prices rather than by distributing dividends.
The Vanguard High Dividend Yield ETF (VYM -1.33%) and the Vanguard Dividend Appreciation ETF (VIG -1.75%) are two of the most popular dividend stock ETFs in the market. However, they have different investment objectives, and therefore one of them might be more appropriate for you.
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Vanguard Dividend Appreciation ETF (VIG) is a smart beta exchange traded fund launched on 04/21/2006.