Low-yielding tech giants Broadcom (0.7%) and Apple (0.4%) wouldn't be the top holdings you'd expect to see in the largest dividend-focused ETF. However, they currently rank as the two largest holdings of the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG), which has nearly $115 billion in assets under management. Instead of holding yield-focused stocks, the Vanguard Dividend Appreciation ETF invests in dividend growers.
It aims to deliver a high total return from share price appreciation and dividend income. This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.
For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » The VIG is a passively managed ETF that aims to track the performance of the S&P U.S. This index screens companies based on several traits.
A company must be part of the U.S. stock market and have increased its dividends for at least the past decade. However, it excludes REITs (which pay non-qualified dividends) and the top 25% of companies by yield. These eliminations remove meaningful yield and risk.
The index then weighs companies by market cap, meaning the largest ones are its top holdings. Given their large size and dividend growth records, Broadcom and Apple currently come out on top. The fund's focus on dividend growth over yield is a wise strategy, given the data on stocks by their dividend policies.
Data source: Ned Davis Research and Hartford Funds. Note: Returns data for S&P 500 stocks from 1973-2025. As that table shows, dividend growers have significantly outperformed companies with no change in their dividend policy, as well as cutters and eliminators.
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