Here's How Many Shares of the Vanguard Dividend Appreciation ETF (VIG) You'd Need for $500 in Yearly Dividends

Source The Motley Fool

Key Points

  • This ETF’s dividend yield of about 1.6% isn’t that impressive.

  • Investors benefit from both dividend growth and capital appreciation.

  • 10 stocks we like better than Vanguard Dividend Appreciation ETF ›

Despite short bursts of heightened volatility this year, the market is in record territory. It makes sense why that kind of performance will drive investors to take on more risk in their portfolios.

But there are certainly investors that favor dividend income. And the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) can provide just what these market participants are looking for. If it's $500 in yearly cash payouts that you want, here's how many shares of this investment vehicle you'd need.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »

Rolled-up money next to calculator and dividends written on Post-it note.

Image source: Getty Images.

Growing dividends and capital appreciation

In October, this ETF paid a dividend of $0.8647 per share. If you extrapolate that payout over an entire year, investors would need to own 155 shares of the Vanguard Dividend Appreciation ETF to generate $500 in annual income. This requires buying $32,000 worth of the stock based on Dec. 11's price.

In the past decade, this ETF's dividend has grown 82%, which means shareholders benefit from a higher income stream. There's also capital appreciation that contributes to returns. The ETF's price has climbed 188% over the trailing-10-year period.

Understand the ETF's composition

There are 338 total stocks in the Vanguard Dividend Appreciation ETF. Investors might think they benefit from broad diversification. However, the top 10 positions account for 34% of the entire portfolio's assets, so there is a bit of concentration at the top.

Should you buy stock in Vanguard Dividend Appreciation ETF right now?

Before you buy stock in Vanguard Dividend Appreciation ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Dividend Appreciation ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $513,353!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,072,908!*

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*Stock Advisor returns as of December 15, 2025.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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