VIG vs HDV: Growing Your Income vs. Maximizing It Now

3 weeks ago 14

David Dierking, The Motley Fool

Tue, April 28, 2026 astatine 10:50 AM CDT 5 min read

When choosing a dividend ETF, investors often request to thin successful 1 of 2 directions with their strategy. They tin people dividend maturation stocks wherever the yields are usually little but they spot steadily expanding dividend payments implicit time. Or they tin take to put successful high-yield stocks wherever they gain much income present but whitethorn beryllium susceptible to much variability.

That's the dilemma erstwhile choosing betwixt the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) and the iShares Core High Dividend ETF (NYSEMKT: HDV). The dividend maturation vs. precocious output statement yet comes down to which way you similar oregon need. But the banal enactment methodology could tilt the determination 1 mode oregon the other.

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There are a fig of factors to see erstwhile weighing these two, truthful let's interruption it each done for these 2 highly rated dividend ETFs.

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Key takeaways

VIG yields 1.7% and requires companies to person 10 consecutive years of dividend growth. HDV yields 3% but focuses connected higher output and quality.
HDV holds 75 stocks versus VIG's 334. This makes HDV a much concentrated portfolio.
VIG has outperformed HDV connected a 10-year annualized basis, 12.9% versus 9.4%, which is reflective of the Vanguard ETF's higher allocation to tech stocks.
The 2 funds person lone a 21% overlap of holdings, making them complementary alternatively of redundant successful a portfolio.

VIG vs. HDV: How the portfolios are constructed

The Vanguard Dividend Appreciation ETF tracks the S&P U.S. Dividend Growers Index, which screens for companies with 10+ consecutive years of yearly dividend growth. Qualifying components are past weighted by marketplace capitalization.

While the fund's strategy delivers connected its dividend maturation committedness (the money has accrued its yearly dividend successful each of the past 12 years), the weighting method gives it a antithetic consciousness from different dividend maturation ETFs. By weighting according to institution size and not immoderate peculiar dividend-related factor, you get respective low-yielding mega-cap tech stocks astatine the apical of the portfolio. The apical 3 holdings are Broadcom, Apple, and Microsoft. Each has a output of little than 1%.

The iShares Core High Dividend ETF is linked to the Morningstar Dividend Yield Focus Index. Eligible securities indispensable people good connected 2 proprietary Morningstar screens, each designed to guarantee fiscal health. Stocks are weighted by the full dollar magnitude of dividends paid alternatively than yield.

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