In my current income portfolio, I hold investments in Singapore banks, Real Estate Investment Trusts (REITs), and Singapore Savings Bonds, all of which have provided a stable income.
Now, I’m considering expanding my portfolio to include dividend-paying stocks from the U.S. market. One way to do this could be through dividend-focused ETFs. In this regard, the Vanguard Dividend Appreciation ETF (VIG) has caught my attention as a potential addition to diversify and strengthen my portfolio.
In this review, I’ll delve into the fundamentals of VIG.
Updated 22 Oct 2026: all fund figures below were checked on 22 Oct 2026 against Vanguard’s official VIG page. Each figure shows its own “as of” date. All amounts are in USD.
Understanding the Index
VIG tracks the S&P U.S. Dividend Growers Index. In plain terms, the index takes U.S.-listed companies (excluding REITs) that have raised their dividends every year for at least 10 consecutive years. It then removes the 25% of eligible companies with the highest dividend yields. The remaining stocks are weighted by market value, with a cap of about 4% per stock at each rebalance.
Fundamentals of VIG ETF
Key Facts
| Fund size (total net assets, all share classes) | $127.7 billion (30 Sep 2026) |
| ETF share class net assets | $109.1 billion (30 Sep 2026) |
| NAV | $243.68 (21 Oct 2026) |
| 52-week range | $210.70 – $246.52 |
| Number of stocks | 333 (30 Sep 2026) |
| Expense ratio | 0.04% |
| SEC yield | 1.51% (30 Sep 2026) |
| Distributions | Quarterly |
| Domicile | United States |
Asset Allocation
VIG exclusively focuses on the U.S. equity market, encompassing a total of 333 stocks as of 30 Sep 2026.
Top 10 Holdings
| Holding | % of fund |
|---|---|
| Microsoft Corp. | 4.90% |
| Apple Inc. | 4.89% |
| Broadcom Inc. | 4.30% |
| Eli Lilly & Co. | 4.10% |
| JPMorgan Chase & Co. | 3.89% |
| ExxonMobil | 2.96% |
| Johnson & Johnson | 2.83% |
| Visa Inc. Class A | 2.53% |
| Walmart Inc. | 2.05% |
| AbbVie Inc. | 2.05% |
| Total | 34.50% |
The top 10 holdings appear to be diversified across different sectors. They include technology companies (Microsoft, Apple, Broadcom), healthcare (Eli Lilly, Johnson & Johnson, AbbVie), financial services (JPMorgan Chase, Visa), energy (ExxonMobil) and consumer staples (Walmart). This diversification can help mitigate risks as it’s not overly reliant on one sector.
Sector allocation
| Sector | % of fund |
|---|---|
| Information Technology | 26.7% |
| Financials | 21.0% |
| Health Care | 18.6% |
| Industrials | 11.3% |
| Consumer Staples | 9.2% |
| Consumer Discretionary | 3.7% |
| Energy | 3.6% |
| Materials | 3.2% |
| Utilities | 2.7% |
VIG appears to be strategically positioned with a strong emphasis on technology, and significant investments in financials and healthcare.
At the same time, it maintains a diversified approach by including various other sectors, though with lesser emphasis on consumer discretionary, energy, materials and utilities, and no communication services.
Performance
Historical performance
| Period | Return |
|---|---|
| Year to date (to 21 Oct 2026) | +12.22% |
| 1 year | +9.77% |
| 3 years (annualised) | +16.51% |
| 5 years (annualised) | +10.72% |
| 10 years (annualised) | +12.86% |
| Since inception, Apr 2006 (annualised) | +9.99% |
Based on Vanguard’s cumulative return of 600.38% since inception, $10,000 invested in VIG at launch in April 2006 would have grown to about $70,038 by 30 Sep 2026 (with dividends reinvested).
Looking at the annual returns of VIG that Vanguard currently publishes (2011 to 2025), the fund has navigated through diverse market conditions. Its most challenging year in that period was 2022, with a return of -9.79%, and its best was 2019, with +29.71%. In 2025 it returned +14.18%.
Dividend Yield
The VIG ETF has an SEC yield of 1.51% as of 30 Sep 2026. Dividends are paid every quarter. The last four payouts (Dec 2025 to Sep 2026) add up to $3.6461 per share, which is about 1.50% of the 21 Oct 2026 NAV.
Dividend Growth
| Payable | Dividend per share |
|---|---|
| Jun 2025 | $0.8712 |
| Sep 2025 | $0.8647 |
| Dec 2025 | $0.8844 |
| Mar 2026 | $0.8334 |
| Jun 2026 | $0.9988 |
| Sep 2026 | $0.9295 |
- Upward trend year on year: The Sep 2026 payout ($0.9295) is about 7.5% higher than the Sep 2025 payout ($0.8647).
- Fluctuating quarterly payouts: Individual quarters move around (e.g. Mar 2026 was lower than Dec 2025), so it is better to look at the trend over a full year rather than one payout.
Expense Ratio
The total expense ratio stands at 0.04%, which is on the lower end for an exchange-traded fund (ETF).
If you invest $100,000 with a 0.04% expense ratio, your annual fee would be $40.
Now, let’s say your investment grows to $200,000. With the same 0.04% expense ratio, your annual fee would then be around $80.
So, as your investment grows over the years, the amount you pay in fees also increases because it’s a percentage of your total investment. This is an important factor to consider, as while the percentage stays the same, the actual dollar amount you’re paying will go up as your portfolio increases in value.
Who Should Consider Investing in VIG?
Risk Tolerance: Ideal for investors with a moderate risk tolerance. VIG’s focus on companies with a consistent history of dividend growth often leads to a portfolio of financially stable and resilient companies, reducing the overall risk compared to more aggressive investments.
Investment Horizon: Best suited for long-term investors. Given its history of steady growth and the nature of dividend investing, VIG is well-aligned with those who have a long-term investment horizon and can weather short-term market fluctuations.
Income Requirements: Appealing for investors seeking regular income. The fund’s focus on dividend growth makes it a viable option for those requiring a steady income stream, such as retirees or income-focused investors.
Diversification Needs: Ideal for investors seeking sector diversification. With holdings across different sectors like technology, healthcare, and financial services, VIG offers a balanced exposure, mitigating risks associated with over-concentration in one sector.
Expense Sensitivity: Favourable for cost-conscious investors. With a low expense ratio of 0.04%, VIG is an affordable choice for investors mindful of minimising fees to maximise returns.
Dividend Growth Focus: Suitable for investors prioritising dividend growth. VIG targets companies that have increased dividends consistently for at least 10 years, catering to those focused on dividend growth as a key investment criterion.
Market Understanding: Appropriate for investors with a basic understanding of the market. While VIG’s diversified approach reduces the need for intensive market knowledge, a fundamental understanding of stock market dynamics can help investors make more informed decisions.
Tax Considerations: Beneficial for investors considering tax implications. As VIG provides dividend income, it’s important for investors to consider the tax treatment of dividends in their investment strategy, particularly those in higher tax brackets.
Conclusion
The Vanguard Dividend Appreciation ETF (VIG) presents a viable option for investors aiming to diversify their income-driven portfolios, especially those interested in the U.S. market. Tracking the S&P U.S. Dividend Growers Index, VIG focuses on stocks with a history of increasing dividends over a decade, ensuring stability and consistent income.
VIG’s diverse holdings span sectors like technology, healthcare, and finance, offering a balanced risk profile. A $10,000 investment at launch in 2006 would have grown to about $70,038 by Sep 2026, highlighting its growth potential and resilience during market fluctuations. The fund’s increasing dividend payouts and low expense ratio of 0.04% further enhance its appeal.
When I first wrote this review in Oct 2023, VIG was nearing its 52-week low ($150.16 as of 29 Oct 2023), which I felt made it an even more compelling opportunity. As of 21 Oct 2026, its NAV is $243.68, near the top of its 52-week range of $210.70 – $246.52, so it is no longer at a discount.
In conclusion, for investors with moderate risk tolerance, a long-term horizon, and a need for regular income, VIG appears to be a prudent choice.
However, as a non-U.S. resident, you should be aware of the additional tax implications.
VIG is domiciled in the United States. E.g. for me as a Singaporean investor, the dividends are subject to a 30% U.S. withholding tax. U.S. estate tax, which ranges from 18% to 40% for U.S. assets worth more than US$60,000, could also apply. Both can significantly impact the net returns from my investment in VIG.
These tax considerations are crucial and might influence the overall attractiveness of investing in U.S.-based assets like VIG.
As always, it’s prudent to consider your personal financial situation, risk tolerance, and investment objectives before making any investment decisions.
