If You Own VIG, This Rising Dividend Fund Deserves a Look Before You Add More
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
The Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) is one of the most popular ways to own companies that keep raising their dividends. VIG gives investors one diversified, hands-off fund built around dividend growth, and its N-PORT filing showed more than $130 billion in total net assets as of July 31, 2026. VIG holders should know that a smaller fund chasing a similar goal has outperformed it. The First Trust Rising Dividend Achievers ETF (NASDAQ:RDVY) returned 315.51% over ten years against VIG’s 263.42%, a gap of 52.09 percentage points. Both ten-year windows begin on November 4, 2016, and both figures assume distributions were reinvested.
Five Years of Results Confirm RDVY’s Lead
A ten-year figure can lean heavily on one strong stretch, so the five-year window offers a useful check. Since November 5, 2021, RDVY returned 65.38% while VIG returned 60.46%. That puts RDVY ahead by 4.92 percentage points.
A VIG holder should note that RDVY stayed in front over the more recent half of the decade too. The lead is real, but it is much smaller than the ten-year headline suggests.
Recent Returns Run Much Closer, and VIG Won the Past Month
Over one year, starting November 4, 2025, RDVY returned 17.6% against VIG’s 15.49%, a lead of 2.11 percentage points. Year to date, RDVY is up 13.06% versus 12.73% for VIG, a gap of just 0.33 percentage points. Both margins are narrow. Over the past year, the two funds have delivered close to the same result.
The past month reversed the order. VIG gained 3.65% while RDVY fell 1.91%, so VIG led by 5.56 percentage points. That one-month swing is larger than RDVY’s entire one-year lead. Anyone who changed a month ago is behind right now. RDVY’s edge shows up over years, and short stretches can run sharply against it.
Similar Goal, Different Rules for Picking Stocks
Both funds target companies that grow their dividends, but they select and weight those companies differently. That is why their results differ.
VIG, whose formal share class name is Vanguard Dividend Appreciation Index Fund ETF Shares, follows the S&P U.S. Dividend Growers Index. Its holdings vary widely in size. In the July 31, 2026 N-PORT filing, each of its three largest positions exceeded 4% of net assets, while some smaller holdings sat below 0.01%.
RDVY seeks results that match the Nasdaq US Rising Dividend Achievers Index. First Trust says the index selects companies with a history of raising dividends that also show the characteristics to keep doing so. The screen considers earnings growth, cash levels relative to debt, and how much of earnings a company pays out as dividends. VIG starts from a company’s dividend-growth record, while RDVY layers financial-strength tests on top of that record.
Taxes and Timing Shape the Cost of Switching
Account type matters more than anything else. In an IRA or 401(k), you can sell VIG and buy RDVY without an immediate tax bill. In a taxable brokerage account, selling VIG shares that have gained value realizes a capital gain, and the tax owed can easily outweigh a few points of annual outperformance.
Some taxable investors keep existing VIG shares and send new contributions and reinvested dividends to RDVY, building a blend over time without triggering a sale. Another option is to swap only the lots with small gains or losses.
Short-term performance can differ sharply. The past month showed that the two funds can split by several points over a few weeks, and RDVY’s recent leads are small enough to disappear when that happens.
Which Investors Gain Most From RDVY’s Long-Term Edge
For investors with a horizon of ten years or more, especially those holding VIG in tax-advantaged accounts, RDVY’s record stands out, since it beat VIG across the ten-year, five-year, one-year, and year-to-date windows. For investors focused on the next year or two, RDVY’s recent edge is thin, and VIG has led by a wide margin over the past month. For holders with large embedded gains in taxable accounts, sending new money to RDVY while keeping existing VIG shares avoids the capital gains tax a sale would trigger.
Contact [email protected] for any questions or corrections.
Ryne Mauck is an investment writer covering exchange-traded funds, retirement planning, and portfolio strategy. Through his work at 24/7 Wall St. and other investment platforms, including Seeking Alpha, he aims to provide clear, research-driven insights that help investors make more informed decisions while maintaining a long-term approach to investing.
Ryne holds a B.Sc. in Finance and an M.A. in Political Science. He is a formerly registered Municipal Advisor Representative and has passed the Series 50, Series 63, and Series 65 exams. His articles are not intended to be, nor should they be interpreted as, financial advice.
