1 Reason to Buy Vanguard Dividend Appreciation ETF (VIG)

Core Viewpoint - The Vanguard Dividend Appreciation ETF (VIG) is not the highest-yielding dividend ETF, but it focuses on investing in stocks that are likely to consistently increase their dividends over time, creating a growing income stream [1][6]. Group 1: ETF Overview - The Vanguard Dividend Appreciation ETF tracks the S&P U.S. Dividend Growers Index, which includes large-cap stocks with a history of annual dividend growth, comprising a total of 337 stocks [2]. - The ETF has a very low expense ratio of 0.05%, meaning that for every $10,000 in assets, the annual investment cost is only $5, which is reflected in long-term performance [4]. Group 2: Investment Strategy - The ETF is not focused on high current yields, allowing for greater exposure to fast-growing companies. For instance, Broadcom, the top holding, has a current dividend yield of about 1% but has increased its payout by 82% over the past five years [5]. - Microsoft, with a 23-year streak of dividend increases, is the second-largest holding in the ETF [5]. Group 3: Long-term Potential - Although the current yields of the stocks in the ETF may not be the highest, they have the potential to provide significantly higher payouts in the future, making it suitable for investors who are a decade or more away from needing income from their portfolios [6].