The expectation for a continued low yield environment and ongoing market volatility has kept the dividend investment theme alive.
Dividend-paying exchange traded funds, such as the Vanguard Dividend Appreciation Index Fund (NYSEArca: VIG), are a popular option for investors seeking income, and stability.
VIG is the largest dividend ETF with nearly $11 billion in assets under management.
The strong interest in dividend yielding exchange traded funds has been reinforced by the ongoing market uncertainty due to the Eurozone debt crisis. There are several ETFs that have garnered the most assets, giving investors better liquidity and U.S. large-cap exposure. [ETF Spotlight: VIG]
VIG tracks the performance of the Dividend Achievers Select Index, which consists of U.S. stocks that have long history of raising their dividends. Every stock in the portfolio must have raised its dividend for a minimum of 10 years in a row. This feature sets this dividend focused fund apart from the rest of the dividend ETF heavies, reports Morningstar. [S&P’s Dividend ETF Pick]
Although VIG touts companies that have solid balance sheets, the overall dividend feature is not overwhelmingly impressive. With a yield of 2.17%, current income is not the objective, compared to the S&P 500’s 1.9%.