Vanguard’s VIG ETF forms a rare death cross: is a deeper crash coming?

The Vanguard Dividend Appreciation ETF (VIG) has crashed this year and has formed a death cross pattern, pointing to more downside in the near term. After peaking at $204 earlier this year, the fund has retreated to $184.40, and has formed a death cross pattern, pointing to more downside in the near term.

VIG is a top dividend ETF

The Vanguard Dividend Appreciation ETF is one of the biggest players in the dividend investing industry. It has grown to accumulate over $102 billion in assets because of its low expense ratio of 0.05% and long history of paying dividends. It has a dividend yield of just 1.8% because of its strong stock performance. 

The VIG ETF has grown its dividend in the last eleven years. Its stock performance has also been better than other comparable ETFs like the Schwab US Dividend Equity (SCHD), Vanguard High Dividend Yield Index Fund ETF Shares (VYM), and iShares Core Dividend Growth ETF (DGRO). 

The VIG ETF tracks companies in the S&P US Dividend Growers Index, which tracks companies in the S&P 500 index that have boosted their dividends for over a year. As such, the index is mostly made up of companies in the technology sector. 

According to Vanguard, 22% of the companies in the VIG fund are in the technology sector. They are followed by firms in the financials, healthcare, consumer staples, and industrials. 

The biggest companies in the fund are Apple, Microsoft, Broadcom, JPMorgan Chase, Eli Lilly, Visa, Exxon Mobil, and Mastercard. 

Read more: 5 Best Dividend ETFs to Buy for Q2 2025

Is the Vanguard Dividend Appreciation ETF a good dividend fund to buy?

A good dividend ETF should exhibit several key characteristics. In addition to having a low expense ratio, it ought to have a high dividend yield. Besides, the goal of investing in these funds is to get a monthly, quarterly, or annual payout.

For example, the S&P 500 index is not considered a dividend fund yet it has a yield of 1.39%. Similarly, the Invesco QQQ ETF is also not said to be a dividend yield of 0.70%.

Therefore, we would not classify it as a dividend fund. Rather, it should be classified as a general ETF comprising 338 companies. 

One way to determine whether an ETF is a good investment is to compare its performance with that of other general funds that track the S&P 500 and Nasdaq 100 indices. 

The fund should be a good investment if it has a superior total return over time. In this case, VIG has a total return of 81% in the last five years. In comparison, the SPY and QQQ ETFs have returned 103% and 117%, respectively. 

This means that an investment in the generic funds generates a better return compared to the VIG fund. This aligns with history, which shows that only a few funds have managed to beat the S&P 500 index over time.

VIG ETF technical analysis

The daily chart indicates that the VIG ETF reached a high of $204 earlier this year. It formed a double-top pattern, with its neckline at $191.25. A double top is a popular bearish reversal pattern.

Worse, the fund has formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. This pattern is one of the most popular bearish patterns in the market. 

The VIG ETF has moved below the 23.6% Fibonacci Retracement level. Therefore, the fund will likely continue falling as sellers target the year-to-date low of $170, down by 8.2% from the current level. A move above the resistance at $190 will invalidate the bearish view.

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