Higher Yield vs. Lower Cost: The Critical Differences Between HDV and VIG
Key PointsVanguard Dividend Appreciation ETF offers a lower expense ratio but a significantly lower trailing dividend yield than iShares Core High Dividend ETF.
Vanguard Dividend Appreciation ETF (VIG) and iShares Core High Dividend ETF (HDV) are two popular dividend-focused funds, each with distinct strategies, cost structures, risks, and portfolio compositions. VIG concentrates on U.S. stocks with a track record of raising dividends for at least a decade, while HDV prioritizes high-yielding domestic equities.
VIG boasts 333 holdings across sectors like Technology, Financial Services, and Healthcare, while HDV maintains a more concentrated portfolio of 75 stocks with a focus on stability and current income. Historically, VIG has provided a total return of 60% with a CAGR of 9.8% since 2021, while HDV has delivered an 83% total return and a 12.9% CAGR over the same period.
HDV also has a higher dividend yield of 3.1% compared to VIG's 1.5%. The cost comparison reveals that VIG has a lower expense ratio of 0.04%, while HDV's ratio stands at 0.08%. To sum up, VIG and HDV present different investment profiles, with HDV offering higher absolute income and stronger performance, while VIG remains an appealing option for cost-conscious investors.
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