Investors really like dividend stocks, but with hundreds of different stocks to choose from, building a diversified portfolio of individual stocks can seem overwhelming. That's why many investors turn to ETFs for dividend investing.
In the following video, Dan Caplinger, the Fool's director of investment planning, looks at the Vanguard Dividend Appreciation ETF (VIG -0.41%). Dan notes that the fund is popular with investors, having attracted about $20 billion in assets under management. With almost 150 different stocks inside the ETF, investors get broad-based dividend exposure at a very low cost. Dan points out that the Vanguard ETF doesn't have the highest yield in the dividend ETF universe, but it does have strong stocks with long track records of raising their payouts consistently. He identifies consumer goods stocks as a fertile source of stocks for the ETF, with Procter & Gamble (PG -0.22%) and PepsiCo (PEP -0.61%)featuring yields around 3% and more than 40 years of dividend increases annually. You'll also find energy stocks among the ETF's picks, including Chevron (CVX 0.60%) and ExxonMobil (XOM 0.10%), both of which qualify as prestigious Dividend Aristocrats.
