Fast Learn
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VIG Focuses on High quality Dividend Growers: The ETF’s index methodology requires 10 consecutive years of dividend development whereas filtering out many potential yield traps.
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Low Charges Are a Main Benefit: With a 0.04% expense ratio, VIG stays one of many least expensive quality-focused dividend ETFs out there.
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The Aim Is Complete Return, Not Yield Chasing: VIG’s comparatively modest yield comes alongside sturdy long-term compounding and decrease focus danger than many tech-heavy market indexes.
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The analyst who referred to as NVIDIA in 2010 simply named his prime 10 shares and Vanguard Dividend Appreciation ETF wasn’t one in every of them. Get them right here FREE.
The analyst who referred to as NVIDIA in 2010 simply named his prime 10 shares and Vanguard Dividend Appreciation ETF wasn’t one in every of them. Get them right here FREE.
In case you are searching for investing dialogue a bit extra subtle than what you usually discover on Reddit, I’d recommend testing the Bogleheads discussion board. It’s populated largely by adherents of John C. Bogle and his philosophy round low-cost index investing. Whereas particular person portfolio implementations differ, the core ideas have a tendency to remain the identical: hold charges low, diversify broadly, and keep the course.
Naturally, that additionally makes Bogleheads pretty skeptical of plenty of trendy various funding merchandise. Most usually are not followers of lined name ETFs as a result of systematically promoting upside can drag on long-term complete returns. In addition they are likely to dislike many buffer ETFs due to their larger charges and extra advanced payoff buildings. And usually talking, most Bogleheads usually are not notably captivated with dividend investing both.
There are just a few exceptions, although. One of many uncommon dividend ETFs that tends to get comparatively constructive reception from that crowd is the Vanguard Dividend Appreciation ETF (NYSEARCA: VIG). This is why VIG stands out, even for these die-hard passive traders.
What Is VIG?
VIG is a passive ETF that tracks the S&P U.S. Dividend Growers Index. The first display requires corporations to have a minimum of a 10-year historical past of consecutive dividend development, which instantly creates a high quality tilt inside the portfolio. On prime of that, the methodology applies one other necessary filter: it excludes the highest 25% highest-yielding corporations.
That may sound counterintuitive at first for a dividend ETF, nevertheless it really serves a really helpful objective. By eradicating the highest-yielding quartile, VIG sidesteps many potential yield traps, that are corporations whose dividend yields look elevated largely as a result of their inventory costs have collapsed because of deteriorating enterprise fundamentals.