Two Vanguard Funds Ideal for Growth and Dividend Investors to Hold Long-Term

Investors seeking a simple, durable core for a long-term portfolio often look for a combination of growth potential and dependable income. Two Vanguard funds — the Vanguard Total Stock Market ETF (VTI) and the Vanguard Dividend Appreciation ETF (VIG) — fit that bill. They offer complementary exposure: broad market growth with VTI and a dividend-focused, quality-tilted sleeve with VIG.

VTI tracks the entire U.S. equity market, from large caps to small caps, delivering exposure to thousands of companies at a very low cost. That breadth means investors participate in secular growth trends while benefiting from automatic diversification. Historically, broad-market funds smooth the volatility of individual stocks and capture market-driven appreciation over decades, making VTI a logical core holding for growth-oriented investors.

VIG, by contrast, targets companies with a history of increasing their dividends year after year. It’s not the highest-yielding dividend fund, but its focus on dividend growth tends to favor financially stable firms with disciplined capital allocation. That profile can provide a steady and rising income stream over time, along with a degree of downside resilience in weaker markets.

Both funds are low-cost, tax-efficient, and readily tradable — attributes that matter for buy-and-hold investors. The combination also addresses multiple objectives: VTI for capital appreciation and broad exposure; VIG for income growth and quality bias. Together they can form the nucleus of portfolios for retirees who want income with upside, or for younger investors who value long-term compounding and a measure of income stability.

Risks remain. VTI is exposed to overall market downturns, and VIG’s dividend-growth strategy can underperform in periods favoring high-yielders or rapid-growth, non-dividend payers. Investors should consider asset allocation, rebalancing, tax implications, and their own income needs before allocating.

For many investors, holding a low-fee broad-market ETF like VTI alongside a disciplined dividend-growth fund like VIG provides an efficient, long-term solution that balances growth and income. The simplicity, cost advantages, and proven track records make them strong candidates for a buy-and-hold core.