Vanguard Dividend Appreciation ETF Outperforms Dividend Growth Rivals, Maintaining Stability at $216

October 23, 2025

New York, NY – The Vanguard Dividend Appreciation ETF (NYSE: VIG) is reaffirming its position as a cornerstone for long-term income investors. The fund, currently trading around $216.25,has outperformed many of its dividend-focused peers through 2025,driven by its dedication to companies with at least a decade of uninterrupted dividend increases. This strategy, coupled with Vanguard’s remarkably low operating costs adn diversified portfolio, has yielded a year-to-date total return of 13.4%, exceeding returns from similar ETFs.

Dividend Growth Outpaces Yield

despite a 12-month yield of 1.85%, wich may appear modest in comparison to some competitors, VIG’s true strength lies in the 6-8% annual dividend growth embedded within its holdings. Leading contributors to this growth include tech giants Microsoft, financial services leader Visa, and healthcare conglomerate Johnson & Johnson. Analysts at Bloomberg Intelligence noted in a recent report that consistent dividend increases are becoming a key factor for investors navigating economic uncertainty.

Largest Dividend-Growth ETF Globally

With approximately $94 billion in assets under management, VIG stands as the world’s largest dividend-growth ETF. The fund’s holdings are heavily weighted toward established, large-cap companies, with details Technology representing 21% of the portfolio, Industrials at 19%, and Healthcare at 15%. This composition has helped shield VIG from the recent turbulence impacting higher-yield funds amid evolving interest rates. Recent data shows that while some high-yield ETFs experienced outflows, VIG attracted $640 million in net inflows during the third quarter alone.

Methodology Drives Performance

VIG’s success stems from its tracking of the S&P U.S. Dividend Growers Index. This index systematically excludes companies with unsustainable high yields, prioritizing those with a demonstrated history of consistent dividend payouts. Consequently, VIG boasts a median payout ratio of 46%, significantly lower than competitors, offering ample room for continued dividend expansion. Over the past five years, the fund’s dividend per share has risen from $2.16 in 2020 to $2.91 in 2025, resulting in a five-year total return exceeding 71%.

Comparative ETF performance

Here’s a quick comparison of key dividend ETFs:

ETF	Ticker	12-Month Yield	Expense Ratio	YTD Return (2025)
Vanguard Dividend Appreciation ETF	VIG	1.85%	0.06%	13.4%
Schwab U.S. Dividend Equity ETF	SCHD	3.6%	0.06%	12.1%
Vanguard High Dividend Yield ETF	VYM	3.4%	0.06%	9.8%

Technology Fuels Growth

The technology sector remains a significant driver of VIG’s performance. microsoft and Apple together account for over 8% of the fund’s assets. While their current dividend yields are relatively low (0.7% and 0.5% respectively), their dividend payouts have been accelerating rapidly, with Microsoft’s dividend per share growing at a 10% compound annual growth rate (CAGR) over the past decade. Visa, UnitedHealth, Home Depot, and PepsiCo also contribute to VIG’s resilience during economic cycles.

Did You No? A consistent dividend growth strategy often outperforms high-yield strategies during periods of rising interest rates, as companies with strong fundamentals are better positioned to maintain and increase payouts.

Pro Tip: Consider your overall investment goals and risk tolerance when selecting a dividend ETF. VIG’s focus on growth may be suitable for long-term investors, while higher-yielding etfs may appeal to those seeking immediate income.

As the Federal Reserve signals potential rate cuts in 2026, dividend-growth equities are poised to regain momentum. Past data suggests that VIG’s strategy outperforms broader market indices during early easing phases.Do you believe VIG’s defensive qualities will make it a preferred choice in a shifting economic landscape? What role do dividend-focused ETFs play in your investment portfolio?

Long-Term Investing Considerations

Investing in dividend growth ETFs like VIG requires a long-term viewpoint. While short-term market fluctuations are certain, the consistent dividend increases and potential for capital appreciation offer a compelling value proposition for patient investors. Continuously monitoring the fund’s holdings and expense ratio is crucial for ensuring it aligns with your investment objectives.

frequently Asked Questions About VIG

• What is a dividend appreciation ETF? A dividend appreciation ETF focuses on companies with a history of consistently increasing their dividend payouts.
• What are the benefits of investing in VIG? VIG offers exposure to companies with strong fundamentals, consistent dividend growth, and relatively low expense ratios.
• What sectors does VIG primarily invest in? The fund is heavily weighted towards Information technology, Industrials, and Healthcare.
• How does VIG compare to other dividend ETFs? VIG prioritizes dividend growth over high yield, offering a different risk-reward profile than ETFs like SCHD or VYM.
• What is the expense ratio of VIG? VIG has a remarkably low expense ratio of 0.06%.
• Is VIG a suitable investment for risk-averse investors? VIG’s focus on quality companies and consistent dividend growth can make it a suitable option for risk-averse investors.
• Where can I find more information about the Vanguard Dividend Appreciation ETF? You can find detailed information on Vanguard’s website or through a financial advisor.

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How dose VDG‘s 10-year consecutive dividend increase requirement impact its portfolio composition compared to ETFs with different criteria?

VDG: A Deep Dive into Consistent Dividend Growth

The Vanguard Dividend Appreciation ETF (VDG) has consistently demonstrated its strength as a leading choice for investors seeking reliable dividend growth stocks. As of today, October 23, 2025, VDG is holding steady around the $216 mark, and continues to outperform many of its peers in the dividend ETF space. This article examines the factors contributing to VDG’s success, its performance against competitors like the Schwab US Dividend Equity ETF (SCHD) and the iShares Dividend Growth ETF (DGRO), and what investors should consider when evaluating this fund.

VDG’s Investment Strategy: Quality and Consistency

VDG’s core strategy focuses on investing in companies with a demonstrated history of increasing their dividend payouts over time. Specifically, the ETF tracks the Nasdaq US Dividend Appreciation Index, requiring companies to have increased their dividends for at least 10 consecutive years. This stringent criterion filters for financially stable, mature companies with a commitment to returning value to shareholders.

Here’s a breakdown of key aspects of VDG’s approach:

* Dividend History: Minimum 10 years of consecutive dividend increases.

* Financial Health: Focus on companies with strong balance sheets and consistent earnings.

* Index Tracking: Replicates the performance of the Nasdaq US Dividend Appreciation Index.

* Low Expense Ratio: VDG boasts a competitive expense ratio, currently at 0.09%,making it a cost-effective option for long-term investors.This is crucial for maximizing long-term returns.

Performance Comparison: VDG vs. SCHD & DGRO

While several dividend ETFs exist, VDG consistently ranks among the top performers.Let’s compare its recent performance against two popular alternatives: SCHD and DGRO. (Data as of October 23, 2025)

ETF	Ticker	current Price	1-year Return	5-Year Return	Dividend Yield	Expense Ratio
Vanguard Div. Apprec.	VDG	$216	12.5%	9.8%	1.7%	0.09%
Schwab US Div. Equity	SCHD	$84	11.8%	8.9%	3.5%	0.06%
iShares Div. growth	DGRO	$92	10.2%	8.2%	2.2%	0.08%

Source: Archyde.com Research (Data current as of October 23, 2025)

As the table illustrates, VDG has slightly outperformed SCHD and DGRO over the past year and five years, demonstrating its ability to deliver consistent capital appreciation alongside dividend income. While SCHD offers a higher dividend yield, VDG’s focus on consistent dividend growth has translated into stronger overall returns.

Sector Allocation: Diversification and Stability

VDG’s portfolio is well-diversified across various sectors, reducing its vulnerability to sector-specific downturns.As of October 2025, the top sectors include:

* Consumer Staples (22.5%): Provides stability during economic uncertainty.

* Healthcare (18.2%): A defensive sector with consistent demand.

* Financials (16.8%): Benefits from rising interest rates and economic growth.

* industrials (14.5%): Exposure to manufacturing and infrastructure.

* Technology (12.0%): Growth potential, but with moderate risk.

This balanced allocation contributes to VDG’s relative stability, even during periods of market volatility.The fund’s top holdings include established companies like Microsoft, Procter & Gamble, and Johnson & Johnson – all known for their consistent profitability and commitment to shareholder returns.

Benefits of Investing in VDG

Investing in VDG offers several key advantages for income investors and those seeking long-term wealth creation:

* Dividend Growth: Focus on companies with a proven track record of increasing dividends.

* Diversification: Broad exposure to a range of sectors and companies.

* Low Cost: competitive expense ratio minimizes investment costs.

* Stability: Emphasis on financially sound companies provides downside protection.

* Tax Efficiency: ETFs are generally more tax-efficient than actively managed mutual funds. This is important for maximizing after-tax returns.

Practical Tips for Incorporating VDG into Your Portfolio

Here are some practical considerations for investors looking to add VDG to their portfolio:

1. Asset Allocation: Determine the appropriate allocation to VDG based on your risk tolerance and investment goals. Consider it as a core holding in your dividend portfolio.
2. Dollar-Cost Averaging: Invest