UDIV vs VIG

UDIVBFranklin U.S. Core Dividend Tilt Index ETF

VIGAVanguard Dividend Appreciation ETF

In short

UDIV Most dividend funds throw out the market and keep the payers. UDIV keeps the market and leans it: an optimizer nudges a broad US index toward higher yield while staying tethered to it. Income tilt, index shape.

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

UDIV The Fund seeks investment results that closely correspond, before fees and expenses, to the performance of the Morningstar US Dividend Enhanced Select 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

• UDIV Six basis points, in a category where the typical fund charges 0.39%. That matches SCHD and undercuts DGRO, the shelf's best-known names.franklintempleton.com
• Roughly 140 stocks selected by an optimizer built to maximize yield per unit of active risk against the broad market, not by simply ranking companies on payout.franklintempleton.com
• Plain index plumbing: it follows the Morningstar US Dividend Enhanced Select Index with one of the tightest label-to-portfolio matches in its peer group. No side bets bolted on.
• Running since 2016 and paying quarterly, which puts it among the stronger implementations in the US dividend-screen crowd.

• 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

• UDIV Thinly traded and modest in size, so bid-ask spreads can run wider than at the household-name dividend ETFs.
• A tilt, not a yield hunt. The index limits how far it drifts from the broad market, which also limits how much extra income the tilt can add.franklintempleton.com
• Fully invested in US stocks with no downside cushion. The dividend tilt shapes the payout, not the drawdown.

• 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 UDIV profile⁠

Full VIG profile⁠