Investors eye defensive dividend stocks as inflation rises and GDP growth slows despite record S&P 500 highs.
The Vanguard Dividend Appreciation ETF (VIG) is emerging as a preferred choice for investors amid rising market risks. While the S&P 500 continues to hit record highs, driven by tech and AI growth, concerns over inflation above 4% and slowing GDP growth persist.
The ETF tracks the S&P U.S. Dividend Growers index, focusing on companies with at least 10 consecutive years of dividend increases. Unlike yield-focused funds, VIG weights holdings by market capitalization, prioritizing larger, financially stable firms.
Analysts highlight consumer spending fatigue and geopolitical tensions as key risks, suggesting a shift toward defensive, income-generating assets.