"Sure, there are some products that pay out increasing amounts over time (such as annuities and other structured products). But for investors holding more traditional portfolios consisting of a mix of stocks and bonds, the bond portion of one's portfolio is typically fixed or fluctuates alongside interest rate movements over time. In contrast, investing in dividend-paying stocks with a track record of raising their dividend distributions over time can provide passive income streams with inflation protection."
"For those looking for dividend appreciation, the aptly-named Vanguard Dividend Appreciation ETF (VIG) is where my mind immediately goes first. This fund screens out the vast majority of top stocks in the market, only holding around 300 stocks which are heavily tilted to quality large-caps. Providing exposure to a range of sectors including consumer defensive stocks, industrials and healthcare names (among others), VIG is an ETF aimed at investors looking for consistent dividend growth over time."
Dividend appreciation differentiates equities from most fixed-income products, where bond payouts are typically fixed or tied to interest-rate movements. Dividend-paying stocks with long histories of annual increases can produce passive income streams with inflation protection and offer superior capital appreciation potential versus fixed income. Three exchange-traded funds are highlighted for meaningful dividend appreciation. Vanguard Dividend Appreciation ETF (VIG) holds about 300 quality large-cap stocks across consumer defensive, industrials, and healthcare sectors. VIG requires holdings to have increased dividends for more than a decade, indicating durable competitive advantages and pricing power that support rising dividends over time.
Read at 24/7 Wall St.
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