Close Menu
Invest Intellect
    Facebook X (Twitter) Instagram
    Invest Intellect
    Facebook X (Twitter) Instagram Pinterest
    • Home
    • Commodities
    • Cryptocurrency
    • Fintech
    • Investments
    • Precious Metal
    • Property
    • Stock Market
    Invest Intellect
    Home»Stock Market»Looking for a Blend of Growth and Dividend Stocks Amid Market Uncertainty? Consider This Low-Cost Vanguard ETF.
    Stock Market

    Looking for a Blend of Growth and Dividend Stocks Amid Market Uncertainty? Consider This Low-Cost Vanguard ETF.

    May 30, 20257 Mins Read


    This year has been nothing like 2023 and 2024. In those two years, the S&P 500 (SNPINDEX: ^GSPC) shot up a whopping 53.2%.

    In 2025, the S&P 500 made new all-time highs in February, then went down over 15% year to date (YTD) at one point in April, and is now down a little over 1% YTD at the time of this writing.

    Advertisement: High Yield Savings Offers

    Powered by Money.com – Yahoo may earn commission from the links above.

    When markets are this volatile, it can be challenging to filter out noise and decide which companies or exchange-traded funds (ETFs) to put your hard-earned savings into. Allocate too much into growth stocks, and you may take on more risk than intended. Put too much into value and dividend stocks, and you could miss out on themes like cloud computing, artificial intelligence, and more.

    Investors looking for balance could always keep it simple and go with an S&P 500 index fund or ETF. But in this day and age, there are plenty of ETFs to choose from so you can better align your investments with your risk tolerance and financial goals.

    Here’s why the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) is an excellent choice for investors looking for a mix of growth and dividend stocks.

    Two people smile while sitting at a table across from a person going over documents.
    Image source: Getty Images.

    The Dividend Appreciation ETF invests in companies across sectors with track records for growing dividends. The fund focuses less on dividend yield and more on earnings growth and a runway for future dividend increases.

    One mistake investors often make when selecting dividend stocks is assuming that a high-yield dividend stock is more committed to its payout than a low-yield dividend stock. That can be true at times, but it isn’t always the case.

    For example, the top four holdings in the Dividend Appreciation ETF are Broadcom (NASDAQ: AVGO), Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), and Eli Lilly (NYSE: LLY). All four stocks yield 1% or less, so they normally wouldn’t be considered good dividend names. But their low yields have more to do with their outperforming stock prices than a lack of dividend raises.

    Broadcom’s stock price has jumped 636% in the last five years, and the company has boosted its dividend by over 80%. Eli Lilly stock is up 336%, and its dividend has more than doubled in five years. By comparison, a stable stalwart like Coca-Cola (NYSE: KO) has only increased its dividend by 24% in the last five years, but it’s a better source of passive income than these names because it yields close to 3%.

    Investors focused on supplementing income in retirement may prefer to go with a reliable, high-yield company with a recession-resistant business model like Coca-Cola or PepsiCo (NASDAQ: PEP), which has an even higher yield than Coke. But folks looking for earnings growth that supports a higher future dividend rather than a higher yield right now will probably like how the Vanguard Dividend Appreciation ETF is structured.

    The Dividend Appreciation ETF isn’t just in growth stocks, as other top 10 holdings include JPMorgan Chase, Visa, ExxonMobil, Mastercard, Costco Wholesale, and Walmart. In this vein, the fund does a good job of targeting industry leaders across stock market sectors. Because the fund has a lot of higher-yield names that are lower-weighted holdings, it averages out to a 1.8% yield for the fund — which is better than the 1.3% yield for the Vanguard S&P 500 ETF (NYSEMKT: VOO).

    Another advantage of the fund is that it isn’t particularly top-heavy. For example, no company has higher than a 4.2% weighting, whereas Microsoft, Nvidia, and Apple alone combine for 18.6% of the Vanguard S&P 500 ETF.

    A good way of comparing the Dividend Appreciation ETF to other low-cost ETFs is by looking at sector weights. Here’s how the Dividend Appreciation ETF stacks up against some of Vanguard’s largest funds by net assets.

    Sector

    Vanguard Dividend Appreciation ETF

    Vanguard S&P 500 ETF

    Vanguard Growth ETF (NYSEMKT: VUG)

    Vanguard Value ETF (NYSEMKT: VTV)

    Information Technology and Communication Services

    23.4%

    39.7%

    57.3%

    9.7%

    Financials

    22.5%

    14.4%

    2.9%

    22.8%

    Healthcare

    17.3%

    10.8%

    6.5%

    15.6%

    Consumer Staples

    11.3%

    6.2%

    0.3%

    9.8%

    Industrials

    11.1%

    8.5%

    9.7%

    15.3%

    Consumer Discretionary

    5.5%

    10.4%

    19.3%

    8.7%

    Materials

    3.4%

    2%

    0.5%

    2.4%

    Energy

    2.8%

    3.2%

    0.7%

    6.5%

    Utilities

    2.7%

    2.6%

    0.2%

    6.1%

    Real Estate

    0%

    2.2%

    1.6%

    3.1%

    Data source: Vanguard.

    As you can see in the table, the Dividend Appreciation ETF is unique because it has similar weightings to the Vanguard Value ETF in sectors like financials, healthcare, and consumer staples, but it has significantly more information technology and communications and less concentration in traditionally high-yield value sectors like energy and utilities.

    The Dividend Appreciation ETF has an expense ratio of 0.05%, which is slightly higher than the 0.04% for the Value and Growth ETFs and the 0.03% for the S&P 500 ETF. But that subtle difference only makes a big impact on an ultra-large scale. Even $100,000 invested in the Vanguard Dividend Appreciation ETF versus the Vanguard S&P 500 ETF would be just $20 more in fees per year. So investors should go with the fund they like best rather than get bogged down by minor differences in fees.

    The Dividend Appreciation ETF checks all the boxes for a plug-and-play tool for putting capital to work no matter what the market is doing. The fund isn’t top-heavy, so investors don’t have to worry about outsized exposure to a handful of companies. The fund doesn’t overly concentrate on certain sectors. It has outsized exposure to some, but not all, value-focused sectors. And it still has significant exposure to growth stocks, with its largest positions being tech stocks like Broadcom, Microsoft, and Apple.

    All told, the Dividend Appreciation ETF may be a better buy than other low-cost ETFs for investors looking for a balance across different market themes rather than choosing between growth or value.

    Before you buy stock in Vanguard Dividend Appreciation ETF, consider this:

    The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Dividend Appreciation ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

    Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $651,761!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $826,263!*

    Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 170% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

    See the 10 stocks »

    *Stock Advisor returns as of May 19, 2025

    JPMorgan Chase is an advertising partner of Motley Fool Money. Daniel Foelber has positions in Nvidia. The Motley Fool has positions in and recommends Apple, Costco Wholesale, JPMorgan Chase, Mastercard, Microsoft, Nvidia, Vanguard Dividend Appreciation ETF, Vanguard Index Funds-Vanguard Growth ETF, Vanguard Index Funds-Vanguard Value ETF, Vanguard S&P 500 ETF, Visa, and Walmart. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

    Looking for a Blend of Growth and Dividend Stocks Amid Market Uncertainty? Consider This Low-Cost Vanguard ETF. was originally published by The Motley Fool



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Posts

    Stock Market Today: Dow and Dollar Gain After U.S. Strikes Iran; Oil Futures Fall — Live Updates – WSJ

    Stock Market

    3 Reliable Dividend Stocks Yielding At Least 3%

    Stock Market

    Stock Market LIVE Updates | Closing Bell: Sensex settles 511 pts lower, Nifty below 25K; HCL Tech, L&T drop 2% each

    Stock Market

    Wall Street’s Most Accurate Analysts Give Their Take On 3 Tech Stocks Delivering High-Dividend Yields – JinkoSolar Holding Co (NYSE:JKS), HP (NYSE:HPQ)

    Stock Market

    Best Income Stocks to Buy for June 23rd

    Stock Market

    RBC Abaisse la Recommandation sur United Utilities, Jugeant le Potentiel de Hausse « Limité »

    Stock Market
    Leave A Reply Cancel Reply

    Top Picks
    Cryptocurrency

    Trump triggers turmoil in cryptocurrency market, miners turn to cloud mining, easily earning $38,000 a day

    Cryptocurrency

    Trump’s Treasury Pick Scott Bessent Pours Cold Water on US Digital Dollar Initiative

    Precious Metal

    UK’s coin maker turning e-waste into gold

    Editors Picks

    Austin Energy asks SW Austin to conserve after Thursday power outage

    August 23, 2024

    Gold hits fresh record high of Rs 78,900 per 10g in Delhi

    October 16, 2024

    Russia drafts bill to treat Bitcoin, digital currencies as property for seizure

    May 21, 2025

    quand la France produit trop d’électricité !

    April 17, 2025
    What's Hot

    Cryptocurrency roundup: Roaring Kitty fraud case dismissal and Ethereum Foundation hacking attempt

    July 14, 2024

    Crude Oil Price Today | WTI OIL PRICE CHART | OIL PRICE PER BARREL

    February 21, 2025

    Actuellement en promo, cet abri de jardin ultra pratique séduit de plus en plus d’acheteurs

    April 22, 2025
    Our Picks

    Allied Gold ouverte à d’autres options de partenariat pour la mine d’or Sadiola

    June 9, 2025

    AI investments see more than twofold rise in 2025 in India

    April 26, 2025

    strategic autonomy strengthens the case for a digital euro

    March 31, 2025
    Weekly Top

    Les pertes de C21 Investments s’aggravent au quatrième trimestre fiscal malgré une hausse de 81 % du chiffre d’affaires

    June 23, 2025

    As Nigeria’s Agricultural Renaissance Begins, Tinubu Launches 2,000 Tractors For Mechanised Farming

    June 23, 2025

    US insists, India resists lower duties on agricultural, dairy, and GM produce: Govt sources

    June 23, 2025
    Editor's Pick

    Asia Siyaka Commodities PLC présente ses résultats pour le troisième trimestre et les neuf mois clos le 31 décembre 2024 -Le 10 février 2025

    February 9, 2025

    Pace of Fintech: Accelerating Innovation

    August 22, 2024

    Rwanda Unveils Ambitious Five-Year FinTech Strategy to Boost Economic Growth and Financial Inclusion

    October 23, 2024
    © 2025 Invest Intellect
    • Contact us
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.