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The 5 Best Index Funds for Optimists

If you’re bullish on the future, follow Warren Buffett’s simple advice

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Best Index Funds #3: Vanguard Dividend Appreciation ETF (VIG)

best-index-funds-vanguard-vig-warren-buffett1-Year Performance: 16.8%
5-Year Performance: 19.2% (annualized)
Expense Ratio: 0.1%

If your investment emphasis is more oriented toward quality, then one of the best index funds to achieve that objective is the Vanguard Dividend Appreciation ETF (VIG).

This fund is pegged to the Nasdaq US Dividend Achievers Select Index, which is a collection of companies with a demonstrated record of increasing dividend payouts over time. We are talking about stalwarts such as Abbott Laboratories (ABT), PepsiCo (PEP) and Procter & Gamble (PG), to name just a few.

The name in a way belies the true strength of VIG. While Vanguard Dividend Appreciation does in fact go after dividend stocks, its focus on companies that increase their payouts still only results in a fund yielding 1.9%. However, it also results in holdings that reflect long-term quality and stability — and that’s the advantage you’re truly gaining in VIG.

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