There are some excellent index funds that focus on dividend stocks, and thanks to the current interest rate environment, dividend yields are generally higher than they've been in years. But while investors pay the most attention to dividend stock index funds focused on high-yield stocks, I'd suggest an alternative approach, especially if you're decades away from relying on your portfolio for income.

Specifically, the Vanguard Dividend Appreciation ETF (VIG -0.62%) focuses on companies that have a strong track record of growing their dividends. Here's a rundown of what the ETF invests in and why it could be a smart index fund to consider if you have $1,000 (or more) to invest today.

What is the Vanguard Dividend Appreciation ETF?

The Vanguard Dividend Appreciation ETF is an index fund that tracks the S&P U.S. Dividend Growers Index. Unlike many other dividend stock indexes, this one doesn't focus on each of its components' yield.

Instead, the S&P U.S. Dividend Growers Index only includes U.S. companies that have increased their dividend every year for at least 10 consecutive years. And not only does it not prioritize high-yield stocks, but it excludes the top 25% highest-yield stocks that meet the 10-year criteria. So, this automatically excludes many real estate investment trusts (REITs) and other stocks that are primarily focused on income.

The ETF includes companies of all sizes. Market caps of the stocks in the index range from a high of $3.3 trillion to a low of just $318 million. The typical stock in the index has a 12% earnings growth rate and trades for nearly 24 times earnings.

Fees and how it has performed

Like most Vanguard ETFs, the Dividend Growth ETF is an extremely low-cost index fund. It has an expense ratio of just 0.06%, which means that for every $1,000 you have invested in the fund, your annual investment expenses are just $0.60. (Note: An ETF's expense ratio isn't a fee you have to pay. It will just be reflected in the fund's performance over time.)

Over the past 10 years, the Vanguard Dividend Growth ETF has delivered 11.1% annualized returns. To put this into perspective, a $1,000 investment compounded at this rate would grow to $2,865 after 10 years, $8,209 after 20 years, and $23,519 after 30 years. In short, this could be a great way to build wealth -- as well as an income stream -- over the long term.

More of a tech focus than your average dividend ETF

This is a weighted index fund that holds 339 stocks as of the latest information. And one key point is that because it focuses on dividend growth as opposed to just stocks with above-average dividends, this includes some of the more exciting tech stocks that aren't included in many dividend ETFs. In fact, nearly one-fourth of the fund's holdings are in the tech sector.

For example, Apple (AAPL -0.55%), Microsoft (MSFT -1.33%), and Broadcom (AVGO -2.98%) are all among the ETF's top five holdings. Other stocks like Visa (V 0.00%) and Mastercard (MA -0.29%), which don't have high yields today, but have excellent track records of market-beating stock performance, are also among the largest holdings.

The point is that while the ETF's overall dividend yield is significantly lower than that of many other top dividend ETFs, it has the clear goal of growing income over time and has tons of exposure to stocks that could beat the market. If you're looking for dividends but are more concerned with future income than a high current yield, the Vanguard Dividend Appreciation ETF is worth a closer look.