The Vanguard Dividend Appreciation Index Fund (NYSEARCA:VIG) seeks to track the performance of a benchmark index aimed at matching the return of common stocks for companies that increase their dividends over time.
VIG primarily focuses on dividend growth. The fund specifically selects U.S.-listed firms that have increased their dividend payments for the past 10 years, while excluding the top 25% highest-yielding companies based on indicated annual dividend yield (IAD).
This results in a portfolio that typically carries a relatively high yield. Holdings are market-cap weighted with individual security weights capped at 4%. The index reconstitutes annually.
Overall, VIG’s investment strategy provides a sustainable growth play based on dividends.
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The adviser employs an indexing investment approach designed to track the performance of the index, which consists of common stocks for companies that have a record of raising dividends. The adviser attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index. Each stock is held in approximately the same proportion as its weighting in the index.
The fund has an average weighted market cap of $256 billion and a 1.95% distribution yield. Its average spread is 0.02%. The ETF has 288 holdings and an expense ratio of 0.06%, meaning it is relatively inexpensive to hold in relation to other exchange-traded funds.
However, as with any opportunity, potential investors should conduct their own due diligence in deciding whether or not this fund fits their own individual investing needs and portfolio goals.
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.