Companies that have consistently increased dividends tend to be high in quality and show a strong potential for growth. These dividend growers have been able to withstand periods of market duress, exhibiting smaller drawdowns as investors sold off riskier assets, while still delivering strong returns on the upside, to generate improved risk-adjusted returns over the long haul.
“The fund outpaced its average large-value Morningstar Category peer by 1.5% annually from its inception in November 2006 through August 2017 and had a more-favorable risk profile to boot,” said Morningstar. “This was attributable to its greater exposure to consumer defensive stocks, smaller exposure to financials stocks, and more-favorable stock exposure within several sectors. The fund’s risk-adjusted returns landed in the top quintile of its category from inception through August 2017.”
VYM yields just under 3% and charges just 0.08% per year, making it less expensive than 92% of rival funds.
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