This High-Quality Dividend-Growth Fund Can Serve as a Core Portfolio Holding
It forgoes high yield to pursue stocks that can sustain the growth of their dividend payments.
Dividend-growth funds focus on companies that have the ability and willingness to increase their dividend payments. Companies that regularly boost their dividends often have sustainable competitive advantages. Such high-quality companies can make excellent core holdings. Morningstar's manager research team recently highlighted three great dividend-growth funds. For this article, I'll take a deeper dive into Vanguard Dividend Appreciation ETF (VIG).
VIG is an excellent fund that offers a diversified portfolio of highly profitable U.S. dividend-paying stocks. Focusing on dividend growth reduces the fund's exposure to firms that have weak fundamentals and may not be able to sustain their dividend payments, which is a risk that often accompanies a narrow focus on yield. The fund's low fee contributes to its edge over the long run and supports its Morningstar Analyst Rating of Gold.
Adam McCullough has a position in the following securities mentioned above: AAPL. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.