In contrast, Vanguard Dividend Appreciation ETF (VIG) follows companies that have raised their dividends year-over-year. VIG has an expense ratio of 0.18%.
Top components include Coca-Cola (NYSE: KO), International Business Machines (NYSE: IBM), Pepsi (NYSE: PEP), Chevron and Exxon Mobil. Top sectors include consumer staples 23.4%, industrials 22.4%, consumer discretionary 15.3% and energy 10.2%.
VIG only tracks companies that have raised dividends form 10 consecutive years and also screens out companies with high leverage and poor cash flow. The fund takes out most value companies and is more growth orientated. Consequently, the ETF may provide dividend yields similar to that of the broader market.
Vanguard Dividend Appreciation ETF
For more information on dividend funds, visit our dividend ETFs category.
Max Chen contributed to this article.