The Vanguard Dividend Appreciation ETF (VIG) delivers income by investing in large-cap companies with a track record of increasing their dividends year over year. Companies that can do this could have the potential to also deliver significant capital growth. VIG generates a yield of about 1.62% and it has a five-year return of around 58%.
Dividend growth investing builds long-term wealth for retirement by focusing on companies that consistently increase payouts. These stocks provide rising income and often deliver superior total returns through compounding. Research from Hartford Funds, using Ned Davis Research data from 1973 to 2025, shows companies that grew or initiated dividends in the S&P 500 achieved higher average annual returns with lower volatility than non-payers or cutters. Over long periods, dividend growers and initiators outperformed the equal-weighted S&P 500 and demonstrated resilience in market declines.
Dividend growth investing provides a reliable, inflation-resistant income stream for retirement by leveraging consistent dividend increases and compounding for long-term wealth.