Saturday, January 28, 2012

Vanguard Dividend Appreciation ETF - VIG

Vanguard Dividend Appreciation ETF, stock ticker VIG, is one of the best ET funds amoung the group. Just think, where can you buy a basket of the best companies in America and get paid a nice dividend while you own shares?

VIG is paying a sweet 33 cent quarterly dividend, which as of today, is a 2.08% dividend yield. Play it safe with this one. Think long term! VIG seeks to track the investment performance of the Dividend Achievers Select Index. Vanguard Dividend Appreciation ETF is an exchange traded share class of Vanguard Dividend Appreciation Index Fund and holds all the stocks in the index by approximately the same proportions as their weightings in the index. Click here to get the run down of all that is VIG!

The month-end top ten largest holdings within VIG as of 12/31/2011 include some of our favorite dividend stocks for the Common Man!

1 McDonald's Corp
2 International Business Machines Corp
3 Chevron Corp
4 Coca-Cola Co/The
5 Exxon Mobil Corp
6 ConocoPhillips
7 Procter & Gamble Co/The
8 Wal-Mart Stores Inc
9 PepsiCo Inc/NC
10 United Technologies Corp

Unlike many funds where adviser and broker fees chip away at your potential dividend income this fund only charges a 0.18% expense ratio. The fund is designed to pay it's owners increasing dividends, year after year! VIG is based on the Mergent Dividend Achievers Select Index which requires companies to have at least a 10 consecutive year history of rising dividends to be considered. Quite selective if you ask me.

While there are certainly no guarantees when it comes to investing in the stock market, true great companies know that the market views their dividend payouts as strong signaling devices of the overall health of their business. Why would any company willingly downgrade what their investors thought of their operations unless it became absolutely necessary? When a company has an established track record of raising its dividend there is a strong incentive to keep the dividends flowing and VIG is well positioned to reap the benefits of that concept.

Bottomline: VIG provides us with safety in dividend payers that are increasing their dividends, as well as provides us diversification over the spectrum of high quality companies. Check out the video below and please do yourself a favor and always reinvest your dividends!

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