This column is the first of the final two articles that will feature domestic dividend-based exchange-traded fund (ETFs). Vanguard Dividend Appreciation ETF (VIG) is the bigger of the two that I want to highlight in this write-up.
The Vanguard group is a well-known investment company with a top-notch indexing operation, so it should come as no surprise that VIG is a huge fund with $22.25 billion in total assets. The fund seeks to track the performance of a benchmark index that measures the investment return of the common stocks of many well-known companies, such as Pepsi and Microsoft.
VIG charges small fees and has an expense ratio of just 0.09%, which is low when compared with competing index funds.
The fund’s yield during the last 12 months has been modest at 2.16%, which barely beats the S&P 500’s return of 2.02% for the year. However, as can be seen in the graph below, the fund has had a strong run since the beginning of this year to notch a year-to-date return of 10.24%.
VIG’s top five holdings are Johnson & Johnson (JNJ), 4.24%; Coca-Cola Co. (KO), 3.86%; PepsiCo Inc. (PEP), 3.86%; Microsoft Corporation (MSFT), 3.70%; and Medtronic plc (MDT), 3.07%. This fund’s top 10 holdings comprise 31.2% of its total assets managed.
The fund is diversified by investing in companies from many different industries. If you are seeking to invest in a diversified ETF that is backed by one of the biggest names in the investment industry, Vanguard Dividend Appreciation ETF (VIG) may just be what you are looking to find.
As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.