5 Best ETFs to Diversify Your Portfolio and Avoid Risks

2. Vanguard Dividend Appreciation Index Fund (NYSE:VIG)

Vanguard Dividend Appreciation Index Fund (NYSE:VIG) seeks to replicate the performance of the S&P U.S. Dividend Growers Index. It is a passively managed fund that remains fully invested. As of May end, the expense ratio for Vanguard Dividend Appreciation Index Fund (NYSE:VIG) is 0.06%. The median market cap stood at $143.9 billion on August 31, and the fund has 289 stocks in its portfolio. The 30 day SEC yield came in at 1.89%. It is one of the best ETFs to diversify a portfolio as investors are protected by safe and growing dividends in the currently volatile market. Dividends are a solid hedge against inflation.

Vanguard Dividend Appreciation Index Fund (NYSE:VIG)’s largest holding is UnitedHealth Group Incorporated (NYSE:UNH), which operates as a diversified healthcare company in the United States. On September 22, investment advisory Raymond James raised the price target on UnitedHealth Group Incorporated (NYSE:UNH) to $635 from $620 and maintained a Strong Buy rating on the shares. Analyst John Ransom issued the ratings update. 

According to Insider Monkey’s Q2 data, 91 hedge funds were bullish on UnitedHealth Group Incorporated (NYSE:UNH), compared to 103 funds in the prior quarter. Boykin Curry’s Eagle Capital Management is one of the leading stakeholders of the company, with 2.8 million shares worth $1.5 billion. 

Here is what Baron Durable Advantage Fund has to say about UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2022 investor letter:

“UnitedHealth Group Incorporated is a leading diversified health and wellbeing company whose divisions include insurance arm, United Healthcare and health care services arm, Optum, which offers care delivery and other services. Shares increased 1.1% on strong first quarter results (revenues were up 14% year-over-year), and the company increased its annual guidance.

The performance was driven by Optum as a result of a growing adoption of value-based solutions. We believe UnitedHealth leads the health care industry in innovation and execution as evidenced by its strong value proposition leading to Medicare Advantage share gains, strong cost controls, and its leadership position in the shift to value-based care.”