2 Vanguard Funds That Both Growth and Dividend Investors Can Buy and Hold Forever

Core Insights - Investors often feel they must choose between high yields and growth, but Vanguard offers ETFs that provide both dividends and growth potential [1] Group 1: Vanguard Dividend Appreciation Index Fund ETF - The Vanguard Dividend Appreciation Index Fund ETF has a yield of 1.6% and an annualized return of 13% over the past 10 years [4] - The fund holds over 300 large-cap stocks, with top holdings including Broadcom, Microsoft, and Apple, which have yields below 1% [6] - The ETF allocates more than 20% of its capital to financial stocks, contributing to its growth rates, while also including higher-yielding stocks like JPMorgan Chase and ExxonMobil [7] Group 2: Vanguard High Dividend Yield Index Fund ETF - The Vanguard High Dividend Yield Index Fund ETF has over 500 holdings and emphasizes financial stocks, which make up 21% of its assets, compared to 18% for tech stocks [8] - This fund has a yield of 2.5% and a low expense ratio of 0.06%, with large-cap value stocks comprising half of its total assets [10] - The fund's focus on sectors like healthcare, consumer staples, and industrials contributes to its higher yield compared to the Dividend Appreciation Index Fund [10] Group 3: Investment Strategy and Benefits - Both ETFs are suitable for investors seeking cash flow and long-term appreciation, offering a more stable investment approach compared to growth stocks [11] - For example, a $10,000 investment in the Dividend Appreciation Index Fund yields $160 annually, while the same amount in the High Dividend Yield Index Fund yields $250 [12] - Building a significant position, such as $1 million, could generate $41,000 in annual dividend income, highlighting the benefits of compounding over time [13]