It’s one thing for a company to maintain its dividends, but it’s another to actually grow those dividends over time, especially in the current market where uncertainty is abundant. Thankfully, Vanguard has a pair of exchange traded funds (ETFs) that do just that.
First off is the Vanguard Dividend Appreciation Index Fund ETF Shares (VIG), which seeks to track the performance of a benchmark index that measures the investment return of common stocks of companies that have a record of increasing dividends over time. The fund employs an indexing investment approach designed to track the performance of the Nasdaq US Dividend Achievers Select Index, which consists of common stocks of companies that have a record of increasing dividends over time.
The advisor attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.
Overall, VIG:
- Seeks to track the performance of the NASDAQ US Dividend Achievers Select Index (formerly known as the Dividend Achievers Select Index).
- Provides a convenient way to track the performance of stocks of companies with a record of growing their dividends year over year.
- Follows a passively managed, full-replication approach.
- Has a low expense ratio of 0.06%.
Getting International Exposure
For investors looking to diversify their fixed income exposure by looking beyond the U.S., there’s the Vanguard International Dividend Appreciation Index Fund ETF Shares (VIGI). VIGI seeks to track the performance of the Nasdaq International Dividend Achievers Select Index, which measures the investment return of non-U.S. companies that have a history of increasing dividends.
The index focuses on high-quality companies located in developed and emerging markets, excluding the U.S., that have both the ability and the commitment to grow their dividends over time. Furthermore, the manager attempts to replicate the target index by investing all, or substantially all, of its assets in the broadly diversified collection of securities that make up the index, holding each stock in approximately the same proportion as its weighting in the index.
VIGI:
- Seeks to track the performance of the NASDAQ International Dividend Achievers Select Index.
- Provides a convenient way to get exposure across developed and emerging non-U.S. equity securities around the world that have a history of increasing dividends.
- Employs a passively managed, full-replication strategy.
- Has a low expense ratio of 0.15%.
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