VIG (Vanguard Dividend Appreciation ETF)

Investing / Portfolios
1

Hi, do you have an opinion about VIG (Vanguard Dividend Appreciation ETF)? I like it because of the low exposure to Financials (actually 8%).
AUM 27.81 B
Expense R: 0.08%
Dividend Yield: 1.98%
Large Cap: 88%
Mid Cap: 11%

2

If it has the word dividend in the name it is probably sub-optimal in Switzerland.

1 Like
3

2% yield is nothing special and about same as the rest of the market

The idea is they invest in companies with “at least ten consecutive years of increasing annual regular dividend payments”, it’s a kind of a quality factor.

4

… and double the TER of VTI (and lesser diversification).

Vanguard is really pushing these factor products lately. I remain unconvinced.

5

So none of you consider a low Financial % a valuable characteristic?

And besides, being a bit similar to the NOBLE (Aristocrats), I thought it could help limiting the max drawdown during crisis (even if not totally sure about that).

6

My view is that (1) it’s hard to isolate this (exposure to financials from possible side-effects) and (2) the soundness of this depends on correctly assuming where we are in the economic cycle. (3) Financials often, the collective wisdom goes, can deal better with rising interest rates.

I find changing the sector allocations goes over my head (complexity) and it requires constant attention.

Edit: I cannot say it’s a bad characteristic. I just hope that in my well diversified funds few financials will go belly-up, so that my long-term buy-and-hold strategy should pay off regardlessly. I also don’t see a reasonable way to protect investments from systemic risks from financials.