VIG leads VUG by 2 percentage points year-to-date, marking the first dividend outperformance in a decade amid rising yields.
Vanguard’s Dividend Appreciation ETF (VIG) has returned about 12% year-to-date, surpassing the Growth ETF (VUG), which is up roughly 10%. This 2-point gap reflects a shift as rising yields pressure long-duration growth stocks, particularly megacap tech holdings in VUG.
The divergence is notable as dividend strategies had underperformed growth for the past decade. VUG’s portfolio, heavily weighted in tech with NVIDIA (NVDA) at 13.3% and Apple (AAPL) at 12.3%, has faced valuation compression amid higher yields.
Investors overexposed to growth may consider rebalancing into dividend-focused or total-market funds to mitigate sector risk.