Vanguard’s VIG Quietly Returned 247% While Investors Chased Higher Yields

2 hours ago 1

David Beren

Fri, May 22, 2026 astatine 11:14 AM CDT 4 min read

Quick Read

Vanguard Dividend Appreciation ETF (VIG) yields conscionable 1.6% but delivered 247% returns implicit a decennary by capturing dividend growers including Microsoft (MSFT) astatine 3.94% of holdings and Johnson & Johnson (JNJ) astatine important weight, with payouts expanding astatine 7% annually to dramatically compound income implicit 15+ years.
The fund’s humble existent output deceives retirees who anchor connected contiguous income, erstwhile the existent wealthiness motor is disciplined dividend increases from premier enterprises that overtake higher-yielding alternatives astir twelvemonth 17 of retirement.
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Retirees evaluating dividend funds thin to anchor connected existent yield, which is precisely wherefore Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) often gets overlooked. The money pays a organisation output of astir 1.6%, which looks unimpressive adjacent to higher-yielding alternatives. Morningstar analysts person repeatedly flagged VIG arsenic a quiescent victor for retirees precisely due to the fact that of that misread. The money is built astir dividend maturation alternatively than dividend size, and the mathematics of compounding income changes the representation meaningfully implicit a 20-year retirement.

What VIG Actually Owns

VIG tracks the S&P U.S. Dividend Growers Index, which mandates 10 oregon much consecutive years of dividend increases and excludes the apical 25% of yielders to successfully sidestep susceptible payouts. The strategy produces 332 holdings heavy weighted toward premier enterprises: Broadcom astatine 5.15%, Apple astatine 4.05%, Microsoft astatine 3.94%, JPMorgan astatine 3.57%, and Eli Lilly astatine 3.32%. Backing the model is astir $124.7 cardinal successful full assets, carrying a microscopic 0.04% disbursal ratio, meaning superior allocators clasp virtually everything the underlying businesses generate.

The income motor is the dividend trajectory of these holdings. Microsoft (NASDAQ:MSFT) has lifted its quarterly payout from $0.36 successful 2016 to $0.91 successful 2026. Johnson & Johnson (NYSE:JNJ) conscionable approved its 64th consecutive yearly increase, lifting the quarterly dividend to $1.34. Procter & Gamble conscionable notched its 70th consecutive yearly increase, with 136 consecutive years of payments since 1890. That is the benignant of payout subject VIG is designed to capture.

The expert who called NVIDIA successful 2010 conscionable named his apical 10 stocks and Vanguard Dividend Appreciation ETF wasn't 1 of them. Get them present FREE.

Does It Actually Deliver?

Over the past decade, VIG returned 247%, narrowly trailing the S&P 500's 262% but beating Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) astatine 240% and crushing the narrower Dividend Aristocrats money astatine 154%. The five-year spread is starker: VIG astatine 64% versus SCHD astatine 50%.

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