What is the main difference between DGRO and VIG?

The main difference is in stock selection criteria: VIG requires 10 consecutive years of dividend increases, while DGRO requires only 5 years.

Which one has a higher dividend yield?

DGRO has a slightly higher dividend yield (around 2.1%) compared to VIG (around 1.8%).

What are the expense ratios for each fund?

VIG has an expense ratio of 0.06%, while DGRO has 0.08%.

Are both ETFs suitable for long-term investors?

Yes, both ETFs are suitable for long-term investors seeking growing income with relatively low risk.

DGRO vs. VIG: Which Dividend-Growth ETF Compounds Your Income Faster?

A comparison between DGRO and VIG, two popular dividend-growth ETFs that invest in large-cap U.S. companies with a history of raising dividends. The key differences lie in their index rules and selection criteria.

The iShares Core Dividend Growth ETF (DGRO) and the Vanguard Dividend Appreciation ETF (VIG) look like siblings on any fund screener: both hunt large-cap U.S. companies with a history of raising dividends, both charge single-digit basis points, and both distribute quarterly. The real divergence sits in the fine print of their index rules.

Details

Selection Criteria

VIG: Tracks the S&P U.S. Dividend Growers Index, requiring at least 10 consecutive years of dividend increases. This makes it more selective and focused on stable dividend growers.
DGRO: Tracks the Morningstar U.S. Dividend Growth Index, requiring only 5 years of dividend growth, allowing inclusion of faster-growing companies.

Yields and Distributions

VIG: Lower dividend yield (around 1.8%) but more consistent dividend growth.
DGRO: Slightly higher yield (around 2.1%) with potential for faster growth.

Fees

VIG: Expense ratio 0.06%.
DGRO: Expense ratio 0.08%.

Context

Both ETFs are excellent choices for investors seeking growing income with relatively low risk. The choice depends on investor preference: if you prioritize stability in dividend growth, VIG may be better. If you prefer a slightly higher yield with faster growth potential, DGRO could be the pick.

What This Means for Investors

There is no one-size-fits-all answer. Investors should evaluate their investment goals and time horizon. Both funds can complement a dividend-focused portfolio.