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Is Vanguard Dividend Appreciation ETF (VIG) a Strong ETF Right Now?
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The Vanguard Dividend Appreciation ETF (VIG - Free Report) was launched on 04/21/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
VIG is managed by Vanguard, and this fund has amassed over $83.77 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. VIG seeks to match the performance of the NASDAQ US Dividend Achievers Select Index before fees and expenses.
The S&P U.S. Dividend Growers Index consists of common stocks of companies that have a record of increasing dividends over time.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.06%, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.73%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For VIG, it has heaviest allocation in the Information Technology sector --about 22.70% of the portfolio --while Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.55% of the fund's total assets, followed by Broadcom Inc (AVGO - Free Report) and Microsoft Corp (MSFT - Free Report) .
Performance and Risk
Year-to-date, the Vanguard Dividend Appreciation ETF has added roughly 14.72% so far, and was up about 20.59% over the last 12 months (as of 09/05/2024). VIG has traded between $150.16 and $196.09 in this past 52-week period.
The fund has a beta of 0.84 and standard deviation of 14.75% for the trailing three-year period, which makes VIG a medium risk choice in this particular space. With about 341 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Dividend Appreciation ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
IShares MSCI EAFE Growth ETF (EFG - Free Report) tracks MSCI EAFE Growth Index and the iShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index. IShares MSCI EAFE Growth ETF has $15.42 billion in assets, iShares Core Dividend Growth ETF has $29.62 billion. EFG has an expense ratio of 0.36% and DGRO charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Vanguard Dividend Appreciation ETF (VIG) a Strong ETF Right Now?
The Vanguard Dividend Appreciation ETF (VIG - Free Report) was launched on 04/21/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
VIG is managed by Vanguard, and this fund has amassed over $83.77 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. VIG seeks to match the performance of the NASDAQ US Dividend Achievers Select Index before fees and expenses.
The S&P U.S. Dividend Growers Index consists of common stocks of companies that have a record of increasing dividends over time.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.06%, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.73%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For VIG, it has heaviest allocation in the Information Technology sector --about 22.70% of the portfolio --while Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.55% of the fund's total assets, followed by Broadcom Inc (AVGO - Free Report) and Microsoft Corp (MSFT - Free Report) .
Performance and Risk
Year-to-date, the Vanguard Dividend Appreciation ETF has added roughly 14.72% so far, and was up about 20.59% over the last 12 months (as of 09/05/2024). VIG has traded between $150.16 and $196.09 in this past 52-week period.
The fund has a beta of 0.84 and standard deviation of 14.75% for the trailing three-year period, which makes VIG a medium risk choice in this particular space. With about 341 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Dividend Appreciation ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
IShares MSCI EAFE Growth ETF (EFG - Free Report) tracks MSCI EAFE Growth Index and the iShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index. IShares MSCI EAFE Growth ETF has $15.42 billion in assets, iShares Core Dividend Growth ETF has $29.62 billion. EFG has an expense ratio of 0.36% and DGRO charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.