DDIV vs VIG

DDIVDFirst Trust Dorsey Wright Momentum & Dividend ETF

VIGAVanguard Dividend Appreciation ETF

In short

DDIV Most dividend funds stop at yield. DDIV adds a second screen: Dorsey Wright's relative-strength momentum ranking, leaving about 50 income payers that are also trending. A trend filter bolted onto an income screen, running since 2014.

VIG VIG buys dividend growth, not fat yields: about 300 US companies with a record of raising their payouts, tracked for 0.04% a year. Running since 2006 and now north of $100 billion, it is the plain-vanilla anchor of the dividend-screen aisle.

Stated mandate

DDIV The Fund seeks to generally track the price and yield performance of the Dorsey Wright Momentum Plus Dividend Yield Index. It normally invests at least 90% of net assets in securities comprising that Index.

VIG The fund seeks to track the S&P U.S. Dividend Growers Index, which represents common stocks of companies with a record of increasing dividends over time.

Why people hold it

• DDIV Two screens, not one. Dividend yield gets you in the door; Dorsey Wright relative-strength momentum decides who stays. Few income ETFs bother with a trend filter at all.ftportfolios.com
• Rules run it, not a manager's hunch. The fund normally keeps at least 90% of net assets in its index's stocks, so you get the stated strategy undiluted.ftportfolios.com
• A concentrated book of roughly 50 names and quarterly distributions, live since 2014 and through several full market cycles.

• VIG At 0.04% a year, the fee is roughly a tenth of the typical dividend-screen fund's 0.39%, and undercuts every other top-graded fund in the group, DGRO and SCHD included.
• The screen rewards a record of increasing dividends rather than the biggest current payout, so the basket leans on payout discipline instead of stretched yields.
• Live since 2006, over $100 billion in assets and actively traded, which shows up as easy fills rather than wide spreads.
• About 300 holdings, cash paid quarterly, and one of the strongest overall implementations in its dividend-screen peer group.

Worth knowing

• DDIV The overlay is not free: 0.60% a year, above the roughly 0.39% median for dividend-screen ETFs and well above plain trackers like SCHD (0.06%) and VIG (0.04%).
• Thinly traded and modest in assets next to the household-name dividend funds. Limit orders matter more here than in a fund that trades by the million.
• Momentum crowds into whatever is working. With about 50 holdings, sector tilts can shift sharply from one rebalance to the next.

• VIG Growth of payouts, not maximum income, is the mandate. That puts it on a different axis than high-dividend funds such as SPYD.
• US stocks only, no bonds and no overseas payers, and sector weights are whatever the index screen spits out.
• Portfolio risk and concentration measures land mid-pack for the category: it is fully invested in equities and drops when the market drops.

Full DDIV profile⁠

Full VIG profile⁠