VIG ETF

VIG provides a good mix of value and growth, boasting a 12% earnings growth rate and a 1.69% yield, which is better than the overall market. Dividends play an important role in long-term profits, making up a large part of total returns over many years, and VIG has increased its dividends by more than 10% annually. Additionally, VIG has a very low expense ratio of just 6 basis points, which helps to enhance returns for investors by keeping costs down.

DGRO provides better dividend payments and growth, making it a better option than VIG, even though VIG has a lower expense ratio and slightly higher total returns with dollar-cost averaging. DGRO focuses on stocks with a 5-year history of dividend growth and considers earnings payout ratios, which helps it perform better. On the other hand, VIG's stricter selection process and exclusion of the top 25% yielders can lead to missed chances and lower dividend growth compared to DGRO.

The Vanguard Dividend Appreciation ETF (VIG), a smart beta exchange-traded fund, was launched on April 21, 2006. It provides extensive coverage of the Large Cap Blend category in the market.

The Vanguard Dividend Appreciation ETF specializes in a specific kind of dividend-paying stock.

Having "dividend" in the name of an ETF doesn't necessarily mean that the fund prioritizes dividend yield. It's important to look at the fund's objectives and strategy. Not all dividend-themed ETFs focus primarily on generating high dividend returns.

The Vanguard Dividend Appreciation Fund and Schwab Dividend Equity ETF are well-known dividend ETFs, with VIG needing a longer history of dividend growth and SCHD focusing on higher yields. While SCHD has slightly outperformed VIG overall, VIG has done better by more than 2% each year since January 2022. The iShares U.S. Quality Dividend ETF could be a stronger alternative to SCHD for Canadian investors, as it has outperformed VIG in 2024, but all these funds still lag behind the S&P 500.

The Vanguard Dividend Appreciation Fund (VIG), WisdomTree US Quality Dividend Growth (DGRW), and the iShares Core Dividend Growth (DGRO) are some of the most popular dividend-focused ETFs in Wall Street, with $102 billion, $15 billion, and $30.7 billion in assets, respectively.

Both Schwab U.S. Dividend Equity ETF and Vanguard Dividend Appreciation ETF offer defensive, high-quality dividend growth with low expense ratios, ideal for uncertain times. SCHD focuses on large-cap value stocks with higher dividend yield and growth, while VIG emphasizes large-cap growth stocks with superior capital appreciation. SCHD's portfolio is more diversified across industries, providing resilience, whereas VIG's market-cap-weighted approach leads to higher concentration in tech-heavy sectors.

I maintain a buy rating on VIG due to its diversified, high-quality portfolio and strong momentum, despite valuation concerns. VIG's solid dividend-hike trend and firms' robust balance sheets position the fund well against macro risks like inflation and GDP slowdown. The ETF's valuation is concerning, but its low expense ratio and strong historical returns make it ideal for long-term investors.