Vanguard Dividend Appreciation ETF (VIG) screens out the top 25% of eligible stocks by dividend yield, even though they have raised annual payouts for at least 10 straight years. Its index prioritizes dividend growth over high current income.
The index weights qualifying stocks by market capitalization. The article explains that high yields may result from falling share prices, sometimes amid business problems that can lead to dividend cuts; it reports VIG’s yield at 1.4% and average annual return since its 2006 inception at 10.2%.
The article discloses that David Dierking has positions in VIG and that The Motley Fool has positions in and recommends the ETF.
