FTDS vs VIG

FTDSCFirst Trust Dividend Strength ETF

VIGAVanguard Dividend Appreciation ETF

In short

FTDS A yield fund with a bouncer at the door: companies must clear debt, return-on-equity, payout and dividend-growth tests before the index ranks them by yield. The roughly 50 survivors get equal weight, rechecked every quarter.

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

FTDS The Fund seeks to track the price and yield performance of The Dividend Strength Index before fees and expenses.

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

• FTDS Balance sheet first: long-term debt under 40% of market cap, ROE above 10%, payout under 50%, five-year dividend growth above 5%. Yield ranking comes after those gates.nasdaqomx.comftportfolios.com
• Equal weight across roughly 50 names, rebuilt quarterly, so no single mega-cap sets the tone.ftportfolios.com
• Rules-based and passive: a Nasdaq-maintained index drawn from the Nasdaq US Benchmark, with liquidity screens. No manager picking favorites. Pays quarterly.nasdaqomx.com

• 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

• FTDS 0.70% net of a waiver through April 30, 2027 (0.81% gross), above the category median. Big index rivals cost far less: SCHD 0.06%, VIG 0.04%.
• A small fund that trades thinly, so the bid/ask spread is part of the cost of getting in and out.
• The ticker dates to 2006, the strategy does not: it tracked Value Line, then AlphaDEX indexes, before switching to The Dividend Strength Index in April 2022.sec.gov

• 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 FTDS profile⁠

Full VIG profile⁠