Invest in Vanguard Dividend Appreciation ETF for long-term growth potential and stronger total returns.

From Nasdaq: 2024-12-16 08:22:00

In a falling-rate environment, real estate investment trusts (REITs) are poised to outperform. The Vanguard Real Estate ETF (VNQ) offers a 3.8% dividend yield and includes top holdings like Prologis, American Tower, and Equinix. On the other hand, the Vanguard Dividend Appreciation ETF (VIG) focuses on large-cap stocks with a history of dividend growth, such as Apple and Microsoft.

While a higher dividend yield is appealing, dividend stocks with a track record of growth often provide stronger total returns. The Vanguard Dividend Appreciation ETF (VIG) may have a lower yield at 1.7%, but it offers growth potential. With top-weighted stocks like Apple and Microsoft, this ETF has produced 12% annualized total returns over the past decade.

Investing in either the real estate ETF or the dividend appreciation ETF depends on your investment style and goals. The real estate ETF may be suitable for current income needs, while the dividend appreciation ETF is better for long-term growth potential. Consider your risk tolerance and investment timeline before choosing between the two ETFs.

Before investing in the Vanguard Real Estate ETF, note that it was not among the 10 best stocks identified by the Motley Fool Stock Advisor analyst team. This service has a history of providing strong stock picks, with returns surpassing the S&P 500 since 2002. Consider the potential for long-term growth and returns before making any investment decisions.



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