VIG Dividend Growth Calculator

What VIG actually tracks

The Vanguard Dividend Appreciation ETF (VIG) follows the S&P U.S. Dividend Growers Index — U.S. companies with at least ten consecutive years of raising their dividend, with one deliberate twist: the index then removes the top 25% highest-yielding eligible names before weighting the rest by market cap. That single exclusion rule is the whole reason VIG behaves the way it does. Rather than reaching for the fattest payout, it screens for a long, unbroken track record of dividend increases and specifically avoids the stretched, high-yield names that most often cut. With roughly $110 billion in assets it is the largest dividend-focused ETF on the market, and at a 0.04% expense ratio it is also one of the cheapest ways to own that screen.

Why the yield is deliberately low

VIG's ~1.5% starting yield sits below almost every other fund in this cluster — under SCHD (~3.3%), VYM (~2.5%), and even the dividend-growth-tilted DGRO (~2.1%). That is not a flaw to fix; it is the direct output of dropping the highest-yielding quartile. What you get in exchange is a payout stream whose growth tends to be steadier and whose underlying holdings skew toward higher-quality, dividend-raising businesses. If your goal is the biggest check this year, VIG is the wrong tool and a higher-yield or covered-call income fund answers that question better. If your goal is a payout that compounds upward over a decade or two with less drama, the low headline yield is the price of admission.

How dividend growth, not yield, does the work

With DRIP switched on, each quarterly distribution buys more shares, and — because VIG holds companies that keep raising the per-share dividend — those shares pay a larger dividend next year on their own. Two things compound at once: your share count and the dividend rate per share. The figure that captures it is yield-on-cost — projected income divided by what you originally contributed — which drifts well above the fund's ~1.5% market yield over a long hold even though the market yield itself stays near where it started. Because that growth rate is uncertain, the calculator anchors it to the stable 10-year CAGR (~7.3%) rather than the noisier recent windows, and reports the result as a band rather than a single promised number.

The tax detail worth knowing

VIG's distributions are almost entirely qualified dividends, taxed at long-term capital-gains rates in a taxable brokerage account — but still taxed in the year they are paid, even when every cent is reinvested. There is a quiet upside to the low yield here: with only ~1.5% distributed annually, the yearly dividend-tax drag in a taxable account is small compared with a high-yield or covered-call fund, and far more of VIG's total return sits in unrealized price appreciation that stays deferred until you sell. The Account toggle above models this directly — the default taxable path subtracts the qualified-dividend tax before the DRIP reinvests, while a Traditional IRA or Roth compounds the same projection untaxed.

All figures here are illustrative and asOf 2026-06; forward price and dividend growth are assumptions, not forecasts. Educational estimates, not investment advice.