Dividend funds are a popular way to access immediate diversification with dividend stocks. Vanguard has some of the lowest-cost ETFs around. Here we’ll explore the best Vanguard dividend funds.
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In a hurry? Here’s the list:
- VIG – Vanguard Dividend Appreciation ETF
- VYM – Vanguard High Dividend Yield ETF
- VIGI – Vanguard International Dividend Appreciation ETF
- VYMI – Vanguard International High Dividend Yield ETF
Prefer video? Watch it here:
Introduction – Why Dividend Stocks?
Dividend stocks are popular amongst income investors and retirees looking to use dividends as regular income. Others seek companies with a historically growing dividend as a sign of a strong, stable company in which to invest. Dividend stocks have been a way to access factor premia such as Value and Quality that have achieved market outperformance over time.
Let’s dive into the 4 best Vanguard dividend ETFs.
The 4 Best Vanguard Dividend Funds
Vanguard offers 4 dividend-oriented ETFs, 2 focused on U.S. companies and 2 international:
VIG – Vanguard Dividend Appreciation ETF
Vanguard’s Dividend Appreciation ETF is the most popular of these 4, with over $45 billion in assets. This fund focuses on dividend growth stocks – companies with an increasing dividend payment for at least 10 consecutive years. The fund seeks to track the NASDAQ US Dividend Achievers Select Index, formerly known as the Dividend Achievers Select Index. This ETF has an expense ratio of 0.06%.
VYM – Vanguard High Dividend Yield ETF
If you’re more concerned with high yield, the Vanguard High Dividend Yield ETF has you covered. It seeks to track the FTSE® High Dividend Yield Index, providing access to high dividend yield stocks, excluding REITs. This fund has over $25 billion in assets and an expense ratio of 0.06%. I compared the specifics of VIG and VYM here if you’re interested.
VIGI – Vanguard International Dividend Appreciation ETF
VIGI is simply the international (ex-US) version of VIG. The Vanguard International Dividend Appreciation ETF seeks to track the NASDAQ International Dividend Achievers Select Index, providing access to international companies outside the United States with a growing dividend payment. This fund has an expense ratio of 0.20%.
VYMI – Vanguard International High Dividend Yield ETF
Similarly, VYMI is the international version of VYM, providing access to international stocks with a higher than average dividend yield, excluding REITs. The Vanguard International High Dividend Yield ETF seeks to track the FTSE All-World ex US High Dividend Yield Index and has an expense ratio of 0.22%.
Where to Buy These Vanguard Dividend ETFs
M1 Finance is a great choice of broker to buy these ETFs. It has zero transaction fees and offers fractional shares, dynamic rebalancing, and a modern, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.
Canadians can find the above ETFs on Questrade or Interactive Brokers. Investors outside North America can use eToro or possibly Interactive Brokers.
All these ETFs are also part of the dividend portfolio I designed for income investors.
Interested in more Lazy Portfolios? See the full list here.
Disclaimer: While I love diving into investing-related data and playing around with backtests, I am in no way a certified expert. I have no formal financial education. I am not a financial advisor, portfolio manager, or accountant. This is not financial advice, investing advice, or tax advice. The information on this website is for informational and recreational purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. Do your own due diligence. Past performance does not guarantee future returns. Read my lengthier disclaimer here.
Don't want to do all this investing stuff yourself or feel overwhelmed? Check out my flat-fee-only fiduciary friends over at Advisor.com.
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