Dividend growth stocks are public companies that have shown a track record of successive year-over-year increases in their dividend payments to shareholders. They represent an attractive way for income investors to augment and further diversify their portfolios away from a strict high yield focus.
One of the easiest ways to own this group is through a low-cost and liquid exchange-traded fund. If you’ve been around the ETF space for a while, you have probably heard of the Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) or the ProShares S&P 500 Dividend Aristocrats ETF (BATS:NOBL). Both funds own a basket of stocks with dividend growth characteristics and have proven to be sound investment vehicles in their own ways.
Yet, as the ETF world continually broadens and innovates, there have been interesting advancements in this segment than some investors may not have taken notice of yet. Below are three funds that continue to push the bar in terms of their portfolio exposure, cost, and overall value proposition for investors.
Vanguard International Dividend Appreciation ETF (VIGI)
If you love VIG, then it’s time to get to know its international cousin in VIGI. This low-cost index fund is one of the newer Vanguard ETFs with about 18 months of track record under its belt. Over that time frame, VIGI has managed to accumulate $425 million in total assets as the tailwind of a falling U.S. dollar and attractive valuation comparisons bolster the case for international stocks. The reasonable 0.25% expense ratio doesn’t hurt either.
VIGI owns 245 foreign stocks with a history of dividend increases. The international exposure includes both developed and emerging market components to support a wide swath of large and mid-sized companies outside of the United States.
A fund like VIGI could potentially be used as a core or tactical international holding to augment traditional domestic equity holdings.
For those investors who prefer currency-hedged international stock exposure, take a look at the WisdomTree International Hedged Quality Dividend Growth Fund (NYSEARCA:IHDG) as an alternative.