Recent Purchase – How I bought into 500+ Dividend and Dividend Growth Companies

From my recent post on midyear goals, I stated that I wanted to direct contributions into more dividend and dividend growth stocks.  By wanting to increase my passive income, I am directing a higher percent of my monthly contributions towards dividend stocks.  In this post, I will discuss my approach.

How did I buy into 500+ Dividend and Dividend Growth Companies?

It was simple.  With 2 Vanguard Index funds:

  • Vanguard Dividend Appreciation Index, VDAIX
  • Vanguard High Dividend Yield Index, VHDYX

I really enjoy reading bloggers who perform their own analysis and share their approach (shout out to:  Dividend Diplomats, Jason Fieber at Mr. Free at 33, etc.).  Doing this analysis and maintaining my own portfolio of individual stocks does not suit me at this time.  While I like geeky things like creating spreadsheets and analyzing data as an engineer, why not have someone else or an algorithm do it for me  while getting exposure to more stocks than I could possibly track…all in an Index fun with a low fee?

Let’s quickly explore the 2 funds:

Vanguard Dividend Appreciation Index, VDAIX:

  • According to the Vanguard Prospectus, “The Fund employs an indexing investment approach designed to track the performance of the Nasdaq US Dividend Achievers Select Index, which consists of common stocks of companies that have a record of increasing dividends over time.”
  • According to the NASDAQ Global Indexes webpage, “The NASDAQ US Dividend Achievers™ Select Index is comprised of a select group of securities with at least ten consecutive years of increasing annual regular dividend payments.”
  • The fund has 187 current holdings, a yield of 1.86%, and an expense ratio of 0.17% as of 7/15/2017.

Vanguard High Dividend Yield Index, VHDYX

  • According to the Vanguard prospectus, “The Fund employs an indexing investment approach designed to track the performance of the FTSE High Dividend Yield Index, which consists of common stocks of companies that pay dividends that generally are higher than average.”
  • The fund consists of 403 holdings, a yield of 3.02%, and an expense ratio of 0.15% as of 7/15/2017.

For my approach, I invest more into the Dividend Appreciation as I am a fan of high-quality stocks.  The higher yield of the High Dividend Yield index is interesting, but I don’t invest as much into it.

For those who invest in Dividend stocks and track your own portfolio, I’m sure there are stocks in these funds that you will not like based on your screening, and you could likely obtain higher yields if you cherry pick stocks with high yields.  For me, I am comfortable investing in these Index funds.

What are your thoughts?  If you have a Dividend or Dividend Growth Portfolio, do you beat the returns (Fund price growth and Dividends)?


Disclaimer:  I do invest in both VDAIX and VHDYX.  Do not follow my advice, as I am not a financial advisor nor in the finance industry.  I am simply sharing my personal journey with finance.

Leave a Reply

Your email address will not be published. Required fields are marked *