(VIG) Vanguard Dividend - Ratings and Ratios

The Vanguard Dividend Appreciation Index Fund ETF (NYSE ARCA: VIG) follows a pure-indexing strategy that seeks to mirror the Vanguard Dividend Appreciation Index, which screens for U.S. large-cap companies with a documented history of raising dividends year-over-year. The fund attempts to replicate the index by holding virtually all constituent stocks in proportion to their index weights, minimizing tracking error.

Key fund characteristics (as of the most recent public data, Q2 2025):
• Expense ratio: 0.06 % – among the lowest for dividend-focused ETFs, enhancing net return potential.
• Dividend yield: ~1.8 % (trailing 12-month), reflecting the emphasis on dividend growth rather than high current yield.
• Number of holdings: ~400, with the top ten stocks accounting for roughly 30 % of assets, heavily weighted toward consumer staples, industrials, and information technology.

Economic and sector drivers that influence VIG’s performance include:
• U.S. consumer confidence and discretionary spending, which affect dividend-paying consumer-staple firms.
• Corporate earnings growth and balance-sheet strength, as companies must sustain earnings to fund rising payouts.
• Monetary-policy stance: lower interest rates typically support higher equity valuations and enable firms to maintain dividend growth, while rate hikes can compress yields and pressure dividend-growth stocks.

Given its focus on dividend-growth leaders, VIG tends to underperform pure high-yield income ETFs during periods of aggressive rate-hiking but can offer superior total-return resilience when earnings growth remains robust.

For a deeper quantitative dive, you might explore ValueRay’s toolkit to model VIG’s risk-adjusted returns and compare its forward-looking dividend growth assumptions with alternative strategies.