VIG Dividend Analysis: Dividend Growth Focus
VIG holds stocks that have raised dividends for 10+ consecutive years. Lower yield, higher quality. Here is the full breakdown.
Don't have time? Here's what you need to know:
- 1VIG tracks companies with 10+ years of consecutive dividend increases — a quality consistency screen
- 2Low yield (1.8%) but includes growth companies (Apple, Microsoft) that SCHD and VYM exclude
- 3Functions more as a quality factor ETF than a traditional income fund
- 4SCHD delivers nearly double the yield with comparable quality — better for income-focused investors
VIG: The Dividend Consistency Fund
VIG (Vanguard Dividend Appreciation ETF) tracks the S&P U.S. Dividend Growers Index — companies with at least 10 consecutive years of annual dividend increases. This is a quality screen: companies that have raised dividends through recessions, pandemics, and market crashes have proven financial resilience. VIG holds about 300 stocks including Microsoft, Apple, JPMorgan, UnitedHealth, and Visa.
VIG's yield is relatively low (~1.8%) because it includes companies that grow dividends aggressively but have low current yields (like Microsoft at 0.7%). The thesis: over 10-20 years, the growing dividends from quality companies produce more total income than higher-starting-yield funds with slower growth.
VIG vs SCHD vs VYM
VIG includes Apple and Microsoft — companies that SCHD and VYM exclude because their current yields are below average. VIG sacrifices current income for growth-oriented dividend payers. Over long periods, VIG's total return has been competitive with the S&P 500 because it holds many of the same growth stocks.
| Metric | VIG | SCHD | VYM |
|---|---|---|---|
| Yield | ~1.8% | ~3.5% | ~3.0% |
| Dividend Growth (5yr) | ~10% | ~12% | ~6% |
| Holdings | 300+ | 100 | 450+ |
| Expense Ratio | 0.06% | 0.06% | 0.06% |
| Includes Apple/Microsoft | Yes | No (low current yield) | No |
| Growth Stock Exposure | Higher | Lower | Lower |
Where VIG Fits
VIG is for investors who want quality stock exposure with a dividend-growth tilt — not for income seekers who need cash flow now. It functions more like a quality factor ETF than a traditional income fund. If your goal is immediate income, SCHD and VYM are better. If your goal is long-term wealth building with a quality tilt, VIG competes with VTI itself.
Many investors find SCHD a better middle ground: higher yield than VIG (3.5% vs 1.8%) with similarly strong quality screens. Unless you specifically want Apple and Microsoft in your dividend fund, SCHD delivers more income with comparable quality.
Tip: VIG's main audience: investors who want the quality of dividend growers without sacrificing exposure to growth companies. If you already own VTI and want to add income, SCHD adds more income per dollar than VIG.
Frequently Asked Questions
Is VIG better than SCHD?
For current income: no — SCHD yields almost twice as much. For total return: roughly comparable. For growth stock exposure: yes — VIG includes Apple and Microsoft. Most income-focused investors prefer SCHD; growth-tilted investors may prefer VIG.
Why is VIG's yield so low at 1.8%?
Because it includes growth companies like Apple (0.7% yield) and Microsoft (0.7%) that grow dividends rapidly but pay small current amounts. SCHD excludes these because their yields are below its threshold. VIG values growth over current yield.
Should I own VIG if I already own VTI?
Marginal value. VIG holds about 300 stocks that are already in VTI. Adding VIG overweights dividend growers, which is a quality tilt. If you want that tilt, VIG adds it. If you are happy with VTI's broad exposure, VIG is unnecessary.
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Alex Harrington
CFA Level II Candidate, Finance & Economics
Alex Harrington is an independent ETF researcher and personal finance writer with over 8 years of experience analyzing exchange-traded funds. A CFA Level II candidate with a background in economics, Alex has reviewed 800+ ETFs and helped thousands of beginners build their first investment portfolios through clear, jargon-free education.
This content is for educational purposes only and does not constitute financial advice. Past performance does not guarantee future results. Consult a licensed financial advisor before making investment decisions.