The Vanguard Dividend Appreciation ETF is reaching new highs due to strong megacap stock performance. It differs from other income-focused ETFs by having exposure to growth sectors like technology. Many companies outside the top holdings have high dividends and a history of increasing payouts. This ETF is still attractive despite its all-time high.

The ETF focuses on companies with growing earnings to support future dividend increases, not just high yields. Top holdings, like Broadcom and Apple, have low yields due to significant stock price appreciation. The fund includes tech giants with impressive dividend growth streaks, distinguishing it from other dividend ETFs.

The Vanguard Dividend Appreciation ETF comprises blue-chip stocks with higher yields and reasonable valuations, offering a competitive P/E ratio and yield versus the S&P 500. Despite reaching all-time highs, the ETF remains appealing for investors seeking a balanced exposure to growth and value stocks. It’s a great option for long-term investors prioritizing dividend quality.

Investors looking to balance megacap growth stocks and blue-chip dividend-paying value stocks may find the Vanguard Dividend Appreciation ETF a better buy than the Vanguard S&P 500 ETF. The emphasis on dividend quality over quantity and exposure to tech stocks like Broadcom make it an attractive option for certain investors.

Read more at Yahoo Finance: This Red-Hot Vanguard ETF Just Hit an All-Time High. Here’s Why It’s Still Worth Buying in August.