3 hours ago
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David Dierking, The Motley Fool
Mon, June 15, 2026 astatine 11:52 AM CDT 3 min read
The tech assemblage and the artificial quality (AI) commercialized proceed to propulsion U.S. banal prices to grounds highs. The S&P 500 is connected gait for its 4th consecutive twelvemonth of double-digit gains. AI-fueled net maturation has been beardown implicit the past year. What's not to like?
Actually, determination are a fewer things. Inflation is backmost supra 4% acknowledgment to surging lipid prices and the warfare successful Iran. Consumer spending fatigue and sentiment person gotten worse. Gross home merchandise maturation is slowing. There are morganatic reasons to deliberation that there's immoderate existent underappreciated marketplace hazard looming.
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That's wherefore I deliberation the adjacent money to ain present is not the Vanguard S&P 500 ETF (NYSEMKT: VOO) oregon the Vanguard Information Technology ETF (NYSEMKT: VGT). It's the much defensive, income-focused Vanguard Dividend Appreciation ETF (NYSEMKT: VIG).
Why VIG has the close portfolio operation
This exchange-traded money tracks the S&P U.S. Dividend Growers index, which screens for stocks that person raised their yearly dividends for astatine slightest 10 consecutive years. It doesn't person immoderate requirements for equilibrium expanse wellness oregon yield. But companies that are consistently paying dividends and person committed to increasing them for years are usually successful a bully fiscal position.
The 1 happening I find absorbing astir the Vanguard Dividend Appreciation ETF is that it's weighted by marketplace capitalization alternatively of by immoderate dividend-related measure. That means the biggest companies get the biggest weights, careless of their output oregon however agelong they've been making dividend payments.
That's however you get Broadcom, Apple, and Microsoft as the apical 3 holdings. It besides helps explicate wherefore the money arsenic a full lone has a dividend output of 1.5%.
But that really produces a unsocial portfolio with elements of some income and growth. The regularly expanding dividend payments assistance offset immoderate of the effects of inflation, portion the tech-heavier allocation (25% of assets are presently invested successful tech stocks) ensures vulnerability to immoderate further AI-fueled rallies.
Why VIG is an ETF to bargain present
With tech net maturation looking coagulated for the remainder of this twelvemonth and 2027, there's each crushed to judge that this assemblage could proceed starring and pushing the marketplace higher. Any dividend ETF that overweights tech comparative to its peers is capable to tilt much conservative, but not excessively conservative. That could beryllium the spot to be, fixed that valuations are inactive a concern.
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