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Is Vanguard Dividend Appreciation ETF (VIG) a Strong ETF Right Now?
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Making its debut on 04/21/2006, smart beta exchange traded fund Vanguard Dividend Appreciation ETF (VIG - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Vanguard, and has been able to amass over $63.81 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the NASDAQ US Dividend Achievers Select Index.
The S&P U.S. Dividend Growers Index consists of common stocks of companies that have a record of increasing dividends over time.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.06%.
It's 12-month trailing dividend yield comes in at 1.84%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For VIG, it has heaviest allocation in the Information Technology sector --about 20.90% of the portfolio --while Healthcare and Consumer Staples round out the top three.
Taking into account individual holdings, Microsoft Corp. (MSFT - Free Report) accounts for about 4.71% of the fund's total assets, followed by Johnson & Johnson (JNJ - Free Report) and Unitedhealth Group Inc. (UNH - Free Report) .
Performance and Risk
Year-to-date, the Vanguard Dividend Appreciation ETF has lost about -9.17% so far, and it's up approximately 1.25% over the last 12 months (as of 05/31/2022). VIG has traded between $145.21 and $172.21 in this past 52-week period.
The ETF has a beta of 0.86 and standard deviation of 21.63% for the trailing three-year period, making it a medium risk choice in the space. With about 267 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Dividend Appreciation ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) tracks S&P 500 DividendAristocrats Index and the iShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index. ProShares S&P 500 Dividend Aristocrats ETF has $10.32 billion in assets, iShares Core Dividend Growth ETF has $23.42 billion. NOBL has an expense ratio of 0.35% and DGRO charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Vanguard Dividend Appreciation ETF (VIG) a Strong ETF Right Now?
Making its debut on 04/21/2006, smart beta exchange traded fund Vanguard Dividend Appreciation ETF (VIG - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Vanguard, and has been able to amass over $63.81 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the NASDAQ US Dividend Achievers Select Index.
The S&P U.S. Dividend Growers Index consists of common stocks of companies that have a record of increasing dividends over time.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.06%.
It's 12-month trailing dividend yield comes in at 1.84%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For VIG, it has heaviest allocation in the Information Technology sector --about 20.90% of the portfolio --while Healthcare and Consumer Staples round out the top three.
Taking into account individual holdings, Microsoft Corp. (MSFT - Free Report) accounts for about 4.71% of the fund's total assets, followed by Johnson & Johnson (JNJ - Free Report) and Unitedhealth Group Inc. (UNH - Free Report) .
Performance and Risk
Year-to-date, the Vanguard Dividend Appreciation ETF has lost about -9.17% so far, and it's up approximately 1.25% over the last 12 months (as of 05/31/2022). VIG has traded between $145.21 and $172.21 in this past 52-week period.
The ETF has a beta of 0.86 and standard deviation of 21.63% for the trailing three-year period, making it a medium risk choice in the space. With about 267 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Dividend Appreciation ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) tracks S&P 500 DividendAristocrats Index and the iShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index. ProShares S&P 500 Dividend Aristocrats ETF has $10.32 billion in assets, iShares Core Dividend Growth ETF has $23.42 billion. NOBL has an expense ratio of 0.35% and DGRO charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.