We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you accept our Privacy Policy and Terms of Service, revised from time to time, and you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Vanguard Dividend Appreciation ETF (VIG) a Strong ETF Right Now?
Read MoreHide Full Article
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $85.84 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Blend. VIG is managed by Vanguard. Before fees and expenses, this particular fund seeks to match the performance of the NASDAQ US Dividend Achievers Select Index.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.06% for this ETF, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.72%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 25.70% of the portfolio. Financials and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.77% of the fund's total assets, followed by Broadcom Inc (AVGO - Free Report) and Microsoft Corp (MSFT - Free Report) .
Performance and Risk
The ETF has added roughly 0.17% and was up about 18.31% so far this year and in the past one year (as of 01/06/2025), respectively. VIG has traded between $169.22 and $204.68 during this last 52-week period.
The ETF has a beta of 0.85 and standard deviation of 14.58% for the trailing three-year period, making it a medium risk choice in the space. With about 340 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 $15.30 billion in assets, iShares Core Dividend Growth ETF has $30.20 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $85.84 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Blend. VIG is managed by Vanguard. Before fees and expenses, this particular fund seeks to match the performance of the NASDAQ US Dividend Achievers Select Index.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.06% for this ETF, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.72%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 25.70% of the portfolio. Financials and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.77% of the fund's total assets, followed by Broadcom Inc (AVGO - Free Report) and Microsoft Corp (MSFT - Free Report) .
Performance and Risk
The ETF has added roughly 0.17% and was up about 18.31% so far this year and in the past one year (as of 01/06/2025), respectively. VIG has traded between $169.22 and $204.68 during this last 52-week period.
The ETF has a beta of 0.85 and standard deviation of 14.58% for the trailing three-year period, making it a medium risk choice in the space. With about 340 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 $15.30 billion in assets, iShares Core Dividend Growth ETF has $30.20 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.