Vanguard launched the first index fund in the 1970s and has since become a leader in low-cost investing. The premise of low-cost investing is straightforward. Lower fund fees allow a greater share of investment returns to pass through to shareholders. Vanguard lives that premise with its index funds as well as its actively managed funds. If you're looking for a cost-efficient mutual or exchange-traded fund (ETF) in any niche, including dividend stocks, the Vanguard fund family likely has what you need.

Here are five low-cost Vanguard dividend funds that can turn your portfolio into a cash machine.

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1. High Dividend Yield ETF 

If your budget is very tight, a passively managed ETF is often a good choice. You save money in two ways. First, passively managed funds have lower operating expenses, because there's no dedicated fund manager at the helm who's paid to trade. The investment decisions are essentially automated, usually to replicate a benchmark index.

And second, ETFs have low minimum investment thresholds. You only have to buy a single share -- or less than that if your broker supports fractional ETF investing. Many mutual funds, on the other hand, have minimum investment requirements, which could be several thousand dollars.

The Vanguard High Dividend Yield ETF (NYSEMKT:VYM)checks both of those boxes. The fund's expenses are 0.06%, or $0.60 annually for every $1,000 you invest. For a share price of around $100, you gain exposure to 410 different dividend-paying companies such as Johnson & Johnson, JPMorgan Chase, Bank of America, and Intel. VYM tracks the FTSE High Dividend Yield Index to deliver a dividend yield of roughly 3.1%.

2. Dividend Appreciation ETF

Vanguard Dividend Appreciation ETF (NYSEMKT:VIG) is also a passively managed ETF, but the investment approach is slightly different. While VYM focuses on high-yielding stocks, VIG invests in companies with rising dividends. The fund tracks the NASDAQ U.S. Dividend Achievers Select Index, a basket of companies that have increased their dividend for at least 10 years consecutively. An increasing dividend is particularly appealing for retirees, who need their income to rise with inflation over time.

The Vanguard Dividend Appreciation ETF also has an efficient 0.06% expense ratio. The portfolio includes 212 stocks, and top holdings are Walmart, Johnson & Johnson, Procter & Gamble, and UnitedHealth Group. The dividend yield is 1.67%.

3. Equity Income Fund

If you'd prefer an actively managed with a fund manager calling the shots, Vanguard Equity Income Investors Shares (NASDAQMUTFUND:VEIPX) may be a good fit. This fund has a $3,000 minimum investment, but it's generating a yield of 2.65% from the 187 stocks in its portfolio. Those companies include Johnson & Johnson, JPMorgan Chase, and Cisco Systems. The expense ratio here is 0.28%.

4. Dividend growth Fund

Vanguard Dividend Growth Fund (NASDAQMUTFUND:VDIGX) is also an actively managed mutual fund with a minimum investment of $3,000. This portfolio is smaller, though, with only 40 positions. Even so, the fund is well diversified across economic sectors.

VDIGX invests in companies that look to be undervalued, which should deliver share price appreciation over time. Johnson & Johnson, UnitedHealth Group, McDonald's, and American Express are the top holdings and the dividend yield is 1.66%. This fund's expense ratio is 0.27%.

5. Growth and Income fund 

Vanguard Growth and Income Fund Investor Shares (NASDAQMUTFUND:VQNPX)also targets share appreciation as well as dividend income. The fund's primary goal is to outperform the S&P 500 index, which it did accomplish over the 12 months prior to Jan. 31, 2021. Over longer periods of time, however, VQNPX returns have tracked just below the index.

The expense ratio is the least efficient of the funds on this list at 0.32%. VQNPX also has a minimum investment amount of $3,000. For those drawbacks, you get massive diversification -- the portfolio includes nearly 1,800 stocks. More than 25% of those are tech companies, but the fund also gives you exposure to healthcare, financials, communication, and consumer discretionary companies. The 10-year average annual returns are nearly 13.5% and the current dividend yield is a modest 1.15%.

Or, make your own dividend fund

You likely noticed that Johnson & Johnson, JPMorgan Chase, McDonald's, and UnitedHealth appear in several of these fund portfolios. If you really wanted to keep your fees low, you could sidestep all fund expenses by investing in these and other dividend stocks individually. It's a viable strategy if your broker doesn't charge you trading fees and you're willing to manage the portfolio on your own.

To go that route, plan on holding at least 20 stocks. That way, you're not overly dependent on any one of them. You could also choose a broker that supports fractional investing to keep your buy-in costs as low as possible.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.