If You'd Invested $1,000 in VIG 5 Years Ago, Here's How Much You'd Have Today

Core Viewpoint - Dividend stocks can achieve healthy growth, contrary to the belief that they are incapable of significant appreciation, as demonstrated by the performance of the Vanguard Dividend Appreciation ETF (VIG) over the past five years [1]. Performance Summary - An investment of $1,000 in the Vanguard Dividend Appreciation fund in August 2020 would now be worth $1,640, plus dividends, and if dividends were reinvested, the value would be $1,800 [2]. - The quarterly dividend payment for the ETF has increased from $0.60 per share in 2020 to $0.87 per share in July, reflecting actual dividend growth over the five-year period [4]. Comparison with Other ETFs - While the Vanguard Dividend Appreciation fund focuses on reliable dividend growth rather than high yields, it has performed comparably to other dividend-oriented ETFs, with only the Vanguard High Dividend Yield ETF (VYM) outperforming it slightly over the past five years [5]. - The Vanguard Dividend Appreciation ETF's underlying index excludes the highest-yielding one-fourth of eligible stocks, which may indicate potential growth challenges for those companies [6]. Yield and Investment Strategy - The exclusion of high-yielding stocks results in a lower average dividend yield for the ETF, currently at just under 1.7%, which may not appeal to investors seeking above-average income [7]. - The fund is best positioned as a defensive investment focused on quality capital growth rather than as a primary source of income [8].