Core Insights - The article discusses three ETFs that can help create a balanced passive income portfolio, focusing on two dividend ETFs and one bond ETF [1][2]. Equity ETFs - Schwab U.S. Dividend Equity ETF (SCHD) tracks the Dow Jones U.S. Dividend 100 Index, selecting companies that have increased dividends for at least 10 years, excluding REITs [3][4]. - The ETF's composite score considers metrics like cash flow to total debt, return on equity, dividend yield, and five-year dividend growth rate, aiming to identify strong businesses with attractive yields [4]. - The trailing dividend yield for Schwab U.S. Dividend Equity ETF is 3.8%, with a low expense ratio of 0.06% [5]. - Vanguard Dividend Appreciation ETF (VIG) tracks the S&P U.S. Dividend Growers Index, focusing on U.S. stocks that have increased dividends for at least 10 years, excluding the highest-yielding 25% [6][7]. - The expense ratio for Vanguard Dividend Appreciation ETF is 0.05%, with a modest yield of 1.6%, but it has shown strong total returns over time [7]. Bond ETF - Vanguard Intermediate-Term Bond ETF (BIV) provides stability to a portfolio by investing in high-quality bonds with maturities between five and ten years, tracking the Bloomberg U.S. 5–10 Year Government/Credit Float Adjusted Index [8][9]. - The expense ratio for Vanguard Intermediate-Term Bond ETF is very low at 0.03%, with a yield around 3.9%, offering a balance between risk and reward [9][10]. Portfolio Strategy - Combining Schwab U.S. Dividend Equity ETF, Vanguard Dividend Appreciation ETF, and Vanguard Intermediate-Term Bond ETF can enhance income, capital appreciation, and diversification, allowing investors to tailor their risk and yield preferences [12].

Core Viewpoint - The Vanguard Dividend Appreciation ETF (VIG) is a low-cost, high-profile investment option that focuses on stocks with a history of increasing dividends, aiming to replicate the S&P U.S. Dividend Growers Index [1][2]. Group 1: Fund Popularity and Size - Vanguard Dividend Appreciation ETF has attracted $115 billion in assets, making it one of the largest ETFs in the U.S. [2] - The fund is significantly larger than its closest competitor, being six times its size [5]. Group 2: Investment Strategy and Cost Efficiency - The ETF has a low annual expense ratio of 0.05%, meaning a $10,000 investment incurs only $50 in operating expenses annually [4]. - It excludes the highest-yielding stocks from the S&P U.S. Dividend Growers Index, focusing instead on stocks with sustainable growth potential [7][9]. Group 3: Portfolio Composition and Performance - The ETF employs a market-cap-weighted methodology, with no single position exceeding 5% of the total portfolio, except for Broadcom, which currently constitutes 6.4% [8]. - The portfolio turnover rate is modest at 11%, indicating a stable investment strategy [9]. - Over the past year, the fund's total return has increased by nearly 11%, with an annualized growth rate of 13.5% over the last decade, primarily driven by capital gains [12]. Group 4: Yield and Stock Composition Concerns - The current annual yield of the ETF is 1.6%, which may disappoint income-focused investors [10]. - The fund's composition is heavily weighted towards large-cap stocks, making up nearly 77% of the portfolio, while small caps account for only 3% [13]. - The weighted portfolio trades at 26 times trailing earnings and 5 times book value, indicating it is not a collection of cheap stocks [14].

Core Insights - The article emphasizes that not all investments require a trade-off between income and growth, highlighting the potential of exchange-traded funds (ETFs) as a low-maintenance, income-generating investment option [1] Dividend ETFs Overview - Not all dividend ETFs are created equal, with some offering better long-term investment potential than others [2] - The Schwab U.S. Dividend Equity ETF (SCHD) currently has a trailing yield of 3.9%, outperforming the Vanguard High Dividend Yield ETF (VYM) which has a yield of 2.5% [3] Performance Analysis - The Schwab U.S. Dividend Equity ETF has underperformed the S&P 500 and other major dividend funds since 2023, primarily due to its lack of exposure to technology stocks benefiting from the AI trend [4] - Despite its above-average dividend yield, the ETF's overall performance has been subpar, raising concerns about its future relative strength [5] Recommended ETF - The iShares Core Dividend Growth ETF (DGRO) is presented as the ideal buy-and-hold dividend ETF for income-focused investors [6] - DGRO has less than $35 billion in assets, significantly smaller than the Vanguard Dividend Appreciation ETF (VIG) and Schwab's U.S. Dividend Equity ETF [7] Fund Characteristics - DGRO tracks the Morningstar US Dividend Growth Index, which includes companies with a minimum of five consecutive years of annual payout increases and excludes the highest-yielding 10% of stocks [9] - The ETF's holdings are weighted based on the value of their dividend payments, with major positions including Johnson & Johnson, Apple, JPMorgan Chase, Microsoft, and ExxonMobil [10] Performance Metrics - DGRO's quarterly per-share payment has nearly tripled over the past decade, showcasing its ability to provide both reliable dividend income and capital appreciation [12] Investment Strategy - While owning multiple income-focused ETFs can be beneficial, DGRO offers a balanced approach that does not require sacrificing growth for reliable income [14] - The only drawback of DGRO is its lower starting dividend yield, which may be acceptable for long-term investors seeking growth [15]

Core Insights - The article emphasizes the attractiveness of exchange-traded funds (ETFs) for long-term investors seeking quality investments that generate recurring income through dividends [1] Group 1: Vanguard Dividend Appreciation ETF - The Vanguard Dividend Appreciation ETF offers a dividend yield of 1.6%, slightly above the S&P 500 average of 1.2%, with a focus on dividend growth, making it appealing for long-term investors [3] - The fund has a low expense ratio of 0.05%, which is significant for long-term investing as lower fees can lead to higher returns over time [4] - The ETF holds over 330 quality dividend stocks, with Broadcom, Microsoft, and JPMorgan Chase as the top three holdings, where Broadcom constitutes about 6% of the portfolio, providing good diversification [5] - In 2025, the fund has generated total returns of 11%, which is close to the S&P 500's 14%, indicating potential resilience in down years due to its dividend growth [6] Group 2: Vanguard High Dividend Yield ETF - The Vanguard High Dividend Yield ETF offers a higher yield of around 2.5%, more than double the S&P 500 average, focusing on high-yielding stocks with 579 holdings as of August 31 [7] - The fund has a low expense ratio of 0.06%, making it a cost-effective option for investors [7] - There is some overlap with the Dividend Appreciation ETF, as Broadcom and JPMorgan Chase are also top holdings, while ExxonMobil, with a 3.5% yield, is among the top three in this fund [8] - Despite the higher risk associated with high-yielding stocks, the ETF's diversification mitigates this risk, as no single stock, apart from Broadcom and JPMorgan Chase, accounts for more than 3% of the portfolio [9] - This year, the ETF's returns have been consistent with the Dividend Appreciation ETF, both achieving over 11% returns including payouts, making them strong long-term investment options [10]

End result? The Vanguard fund's top three holdings right now are Broadcom , Microsoft , and JPMorgan Chase , while the iShares ETF's biggest three positions at this time are Apple , Microsoft, and Johnson & Johnson . They're more different than alike, even if there is some overlap.Take a comparison of the S&P U.S. Dividend Growers Index behind Vanguard's Dividend Appreciation fund to the iShares Core Dividend Growth ETF's Morningstar US Dividend Growth Index as an example. The former consists of U.S.-listed ...

Core Viewpoint - The Vanguard Dividend Appreciation ETF is positioned as a strong investment option during government shutdowns, providing a reliable income stream and solid performance despite market uncertainties [3][12]. Group 1: Market Context - Government shutdowns can lead to significant disruptions, affecting federal employees and essential services, but historically, the stock market tends to remain stable during such periods [1][2]. - Travelers are experiencing delays and cancellations at airports due to the shutdown, highlighting the broader impact on services [2]. Group 2: Vanguard Dividend Appreciation ETF Overview - The Vanguard Dividend Appreciation ETF is based on the Nasdaq US Dividend Achievers Select Index, which includes companies that have increased dividends for at least 10 consecutive years and excludes high-yield, unstable companies [4][5][6]. - The ETF focuses on blue-chip stocks, with the top 10 holdings representing a diverse mix across technology, industrial, and financial sectors, accounting for 64% of the fund [6][7]. Group 3: Performance Metrics - The ETF's top holdings include Broadcom, Microsoft, and JPMorgan Chase, with one-year returns ranging from -5.3% to 91.2%, showcasing a mix of performance [8]. - The Vanguard Dividend Appreciation ETF has achieved a one-year performance gain of 10% and offers a dividend yield of 1.6%, providing a favorable total return [9][10]. Group 4: Cost Efficiency - The ETF features a low expense ratio of 0.05%, equating to $5 annually per $10,000 invested, making it a cost-effective option for investors [13].

Core Insights - The Vanguard Dividend Appreciation ETF provides exposure to both income and growth sectors, with significant holdings in artificial intelligence companies like Broadcom and Microsoft, and a notable position in Apple [1][4] - The ETF is designed to track the S&P 500 U.S. Dividend Growers Index, consisting of 337 holdings across various sectors, with a strong emphasis on information technology and financials [3][4] - The ETF has a low expense ratio of 0.05% and offers a dividend yield of 1.6%, making it an attractive option for investors seeking passive income [7][4] Sector Exposure - The ETF has a 15.1% weighting in healthcare stocks, providing diversification that can mitigate risks associated with downturns in specific industries [2] - Information technology and financials dominate the ETF's holdings, representing 26.1% and 22.6% of the portfolio, respectively [3] Market Context - The S&P 500 has experienced significant gains, with a 12.3% increase year-to-date, following a 20% rise in both 2023 and 2024, leading some investors to seek more stable income-generating investments [6][4] - The ETF's focus on dividend growth stocks is particularly appealing in the current market environment, where investors are cautious about potential sell-offs [4][5]

Core Insights - The S&P 500 has achieved an 11.2% year-to-date total return, indicating strong market performance and potential for continued growth [1] - The current high valuations of the S&P 500 put pressure on companies to meet elevated expectations, emphasizing the need for investments in companies with solid fundamentals [2] Investment Strategies - Dividend-paying growth stocks and covered call ETFs are highlighted as effective strategies for generating income in a declining market [1][16] - The Vanguard Dividend Appreciation ETF focuses on growth and value stocks that can increase earnings and dividends over time, rather than high-yield low-growth companies [5][6] - The iShares Core Dividend Growth ETF offers a diversified portfolio with a 2.1% dividend yield, making it suitable for investors seeking passive income [12][13] - The Global X S&P 500 Covered Call ETF employs a strategy of buying the S&P 500 index and writing call options, providing a current distribution yield of 13.5% [16][20] Fund Characteristics - The Vanguard Dividend Appreciation ETF has a low expense ratio of 0.05% and is designed for investors who prioritize dividend quality over quantity [11] - The iShares Core Dividend Growth ETF includes major industry players like Broadcom and Apple, with a focus on companies that have a history of increasing dividends [14][15] - The Global X S&P 500 Covered Call ETF is structured to provide income during market downturns, although it may underperform in rapidly rising markets [19][20]

Core Insights - The Schwab U.S. Dividend Equity ETF has shown significant growth, with a 45% increase over the past five years and over 130% in the last ten years, driven by the quality of its holdings and stock buyback programs [1][3][6] - The ETF is based on the Dow Jones U.S. Dividend 100 Index, which emphasizes reliable dividend payments, cash flow, and return on equity, distinguishing it from traditional cap-weighted funds [2][4] - The Vanguard Dividend Appreciation ETF has approximately $100 billion in assets and focuses on reliable dividend growers, with notable holdings including Broadcom, Microsoft, and JPMorgan, and has seen its quarterly payments nearly double over the past decade [7][8] - The Vanguard Dividend Appreciation ETF has produced a 186% price increase over the last ten years, benefiting from the rise of technology stocks [9] - The Vanguard High Dividend Yield ETF currently has a modest yield of 2.5%, which is below expectations, and has been affected by the performance of its largest holdings [13][15][17] ETF Performance and Characteristics - The Schwab U.S. Dividend Equity ETF offers a trailing yield of just under 3.8%, appealing to income-focused investors, although higher yields can be found elsewhere [3][6] - The Vanguard Dividend Appreciation ETF's yield is relatively low at just over 1.6%, primarily due to its selection criteria that exclude high-yield stocks [10][11][12] - The Vanguard High Dividend Yield ETF's yield has decreased significantly since late 2023, as its largest holdings have outperformed in the broader market [15][16][17] Investment Considerations - Dividend stocks and ETFs provide a simpler solution for investors seeking reliable income that grows over time, with ETFs being less hassle than individual stock purchases [5] - The Schwab U.S. Dividend Equity ETF is recommended for income investors seeking relative safety, despite trailing the S&P 500 in performance when dividends are not reinvested [6] - The Vanguard High Dividend Yield ETF may not be a suitable investment currently due to its underwhelming yield and market conditions affecting its performance [13][17]

Core Viewpoint - The Vanguard Dividend Appreciation ETF is an attractive investment option for long-term growth-oriented investors, but it may not be suitable for those seeking immediate income [2][12]. Investment Strategy - The ETF tracks the S&P U.S. Dividend Growers Index, focusing on U.S. companies that have increased their dividends for at least 10 years [3][5]. - The ETF eliminates the highest-yielding 25% of stocks, which indicates it is not designed for income seekers [5][6]. Dividend Performance - The ETF currently has a dividend yield of 1.7%, which is lower than many income-focused ETFs [6]. - Since its inception in 2006, the ETF's dividend has increased by more than 750%, suggesting significant long-term income potential for investors who hold it [11]. Target Investors - The ETF is ideal for investors with a long time horizon until retirement, as it offers exposure to companies with a history of dividend growth [8][10]. - It is also suitable for growth-oriented investors who appreciate the compounding effect of reinvesting dividends over time [9][10]. Cost Efficiency - The ETF has a low expense ratio of 0.05%, making it a cost-effective way to gain diversified exposure to over 300 stocks [9].