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VANGUARD US DIV APPR IDX ETFVGG.TOTOP PICKAug 26, 2016Stock price when the opinion was issued
As of Jun 15, 2026. Market Open.
Great that the viewer is starting her son out early. Years of compounding growth is the best thing that any investor can do.
For anything that's related to just the S&P 500, you really need to know what you're buying. Make sure you diversify beyond the top 10 S&P names. Perhaps VGG, where you still get exposure to tech but more dividend appreciation. Another approach is to look at ETFS that focus on quality, such as QUAL or ZUQ among other names. These two screen for strong ROEs and low leverage.
Capital gains are generally the most tax-efficient in a non-registered account, which is likely why it seems most individuals hold VGG in a registered account as it pays a distribution. However, the distribution is small (1.6%), so we would not be overly concerned with the slight tax efficiency downside within a non-registered account. We would be comfortable holding with a non-registered account.
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An offshoot of VIG (US dollar version). Holds a basket of rising dividends over the past 10 years, like JNJ and Visa. Important to invest in rising, not static dividends as interest rates rise. Pays a 2.2% dividend yield. This remains good. For more growth though lower dividends, look at VVL. Consider taxation in a non-registered account.
A simple basket of US names that have a history of increasing their dividends over the last 10 consecutive years. As US interest rates move higher, he thinks dividend growth companies will outperform those with little or no dividend growth. Year-to-date and over the past year, this has outperformed the broader S&P 500.